USDT and USDC Establish Their Own Networks

[GiftedMAN]

Yeah, pretty much bad news. The good thing about these stable coins when they're all available in almost every chain. And for that reason, it has helped a lot of transaction happen due to that availability. If they're developing only on their own network, we can't blame them but I think the one that will emerge is the one that's very adoptive and flexible in every usage for the sake of every user that wants to use it.

Having there one blockchain would not be a problem but it would not make any sense when we can't send out stablecoins using other networks. If this happens, many users and holders would have to switch to other unpopular stablecoins that will make sending out funds much easier. I think USDC is being owned by whales that would want to manipulate the market so they can be monopoly.

[Kavelj22]

What does it mean that they will be only used for payments? I know that almost all those stable coins are mainly used as a trading instrument. This is can explained how the first USDT stable coin was made by a trading platform then expanded yo other networks. Means that USDT at the time weren't used outside of those platforms before supported by known networks.

I didn't read anywhere that it will be only used for payments, but that payments will me one of the main uses. Where did you see that?

First stablecoin ever ussued was back to 2014 called bitusd in the bitshares blockchain network. This initiative was encouraged by exchange platforms as an additional feature for its users to freeze their crypto balances when price crashes. This is why i called it a trading instrument more than a real cryptocurrencies especially those backed by the US dollar.

Then other USD stablecoins lunched in other networks which confirm its use within exchangers because at the time each exchanger supports one usdt network which mean not easy to move usdt from exchange to another unless they both support the same network. It was much more complicated than today.

[Abiky]

They are not discontinuing support on other chains. Tether isn’t even launching this new blockchain themselves. They are only investors in new L1s that use their token as the native asset. It is not in their best interest to be exclusive to a single chain when they are so dominant across many chains.

USDC is also very dominant, especially in DeFi. It would break too many things for Circle to pull out all that liquidity. In fact, they are actually expanding to more chains as Hyperliquid will soon get native USDC.

If Tether and Circle are interested in low-cost, high-performance transactions while preserving security, launching a L2 network on top of Ethereum would be the way to go. No need to create an independent chain of their own. It seems they're more into control, power, and manipulation than anything else. Even if they stop supporting stablecoin variants on other chains, there's nothing stopping developers from creating a bridge than would link tokens from their chain to others. And if Tether and Circle's new chains are EVM-compatible, the process would be easier.

I'm yet to see how regulators would react with such a move. If they didn't allow Facebook to proceed with the Libra/Diem project, what makes you think they will allow stablecoins to have their own chain? By doing so, Tether and Circle would become centralized financial institutions (more like banks). All subject to FinCEN laws in the US and whatnot. I'd "stick" with truly-decentralized stablecoins (eg: DAI) just to be safe. I mean, they're also risky but at least they're not subject to the likes of corporate entities. We'll see what happens in the long run.

[hugeblack]

I'm yet to see how regulators would react with such a move. If they didn't allow Facebook to proceed with the Libra/Diem project, what makes you think they will allow stablecoins to have their own chain? By doing so, Tether and Circle would become centralized financial institutions (more like banks). All subject to FinCEN laws in the US and whatnot. I'd "stick" with truly-decentralized stablecoins (eg: DAI) just to be safe. I mean, they're also risky but at least they're not subject to the likes of corporate entities. We'll see what happens in the long run.

There is a new law for stablecoins, and these companies certainly have legal advisors who know what they're doing. The situation is completely different from what it was during the Libra/Diem project.

Generally, these companies were able to freeze tokens, and they did it across multiple blockchains. However, there has been no freeze on individual addresses, and this appears to be the next step.

[gunhell16]

Yeah, pretty much bad news. The good thing about these stable coins when they're all available in almost every chain. And for that reason, it has helped a lot of transaction happen due to that availability. If they're developing only on their own network, we can't blame them but I think the one that will emerge is the one that's very adoptive and flexible in every usage for the sake of every user that wants to use it.

Having there one blockchain would not be a problem but it would not make any sense when we can't send out stablecoins using other networks. If this happens, many users and holders would have to switch to other unpopular stablecoins that will make sending out funds much easier. I think USDC is being owned by whales that would want to manipulate the market so they can be monopoly.

That's exactly what's going to happen. Even I would look for other alternatives to transfer it to our fiat currency here. There are still many other choices we can pick from.
It just depends on which crypto assets the P2P merchants will accept to convert our crypto assets into fiat.

And is that final? Or will it take a while before it's actually implemented? We know that for years, thousands or millions of people in the crypto community
have been using stablecoins, right?

[DeathAngel]

This is a good thing, it further legitimises crypto in the minds of the general masses & governments. USDT & USDC are going to make the Dollar more powerful as in the modern times people will use them for trade. The fact that they are backed by the USD helps it retain its status as world reserve currency.

[Dunamisx]

Yeah, pretty much bad news. The good thing about these stable coins when they're all available in almost every chain. And for that reason, it has helped a lot of transaction happen due to that availability. If they're developing only on their own network, we can't blame them but I think the one that will emerge is the one that's very adoptive and flexible in every usage for the sake of every user that wants to use it.

Having there one blockchain would not be a problem but it would not make any sense when we can't send out stablecoins using other networks. If this happens, many users and holders would have to switch to other unpopular stablecoins that will make sending out funds much easier. I think USDC is being owned by whales that would want to manipulate the market so they can be monopoly.

The earlier the better that they understand the needs for them to have their own network, because a time will come they may not be able to stand more comfortable with some terms and conditions for the use of some specific networks, anything can happen between now and the future and things will always remain unpredictable as we can't say what may happens.

[Iamgoat]

What does it mean that they will be only used for payments? I know that almost all those stable coins are mainly used as a trading instrument. This is can explained how the first USDT stable coin was made by a trading platform then expanded yo other networks. Means that USDT at the time weren't used outside of those platforms before supported by known networks.

I didn't read anywhere that it will be only used for payments, but that payments will me one of the main uses. Where did you see that?

First stablecoin ever ussued was back to 2014 called bitusd in the bitshares blockchain network. This initiative was encouraged by exchange platforms as an additional feature for its users to freeze their crypto balances when price crashes. This is why i called it a trading instrument more than a real cryptocurrencies especially those backed by the US dollar.

Yes. I think you're correct to call it a trading instrument rather than a real crytocurrency because it's work then which is still the work of most stable coins today was to give traders an advantage and leverage to park their money safely from the bitcoin and other altcoin ecosystems especially when the market is crashing. Instead of allowing all your assets to vanish, stable coins becomes the safe heaven for crypto traders who decide to protect their value before entering another trade serving as a digital version of the USD with almost if not exact same value with the fiat version of dollar. the idea of stable coins is a major milestone in the crypto space in my submission.

[Kavelj22]

What does it mean that they will be only used for payments? I know that almost all those stable coins are mainly used as a trading instrument. This is can explained how the first USDT stable coin was made by a trading platform then expanded yo other networks. Means that USDT at the time weren't used outside of those platforms before supported by known networks.

I didn't read anywhere that it will be only used for payments, but that payments will me one of the main uses. Where did you see that?

First stablecoin ever ussued was back to 2014 called bitusd in the bitshares blockchain network. This initiative was encouraged by exchange platforms as an additional feature for its users to freeze their crypto balances when price crashes. This is why i called it a trading instrument more than a real cryptocurrencies especially those backed by the US dollar.

Yes. I think you're correct to call it a trading instrument rather than a real crytocurrency because it's work then which is still the work of most stable coins today was to give traders an advantage and leverage to park their money safely from the bitcoin and other altcoin ecosystems especially when the market is crashing. Instead of allowing all your assets to vanish, stable coins becomes the safe heaven for crypto traders who decide to protect their value before entering another trade serving as a digital version of the USD with almost if not exact same value with the fiat version of dollar. the idea of stable coins is a major milestone in the crypto space in my submission.

But this cannot eliminate the major risk in using those stablecoins. The risk starts when traders chose to store their savings in those stablecoins thinking they are safe haven for long term storage, while they ignore the fact that most of those issued tokens have no cover in real asset value. Those stablecoins should be backed by usd reserve, but in many times we discover that they are not backed by any reserve. This leads the emerge of some company services whose their role is to issue those stablecoins and garantee the cover reserve.

[TastyChillySauce00]

But this cannot eliminate the major risk in using those stablecoins. The risk starts when traders chose to store their savings in those stablecoins thinking they are safe haven for long term storage, while they ignore the fact that most of those issued tokens have no cover in real asset value. Those stablecoins should be backed by usd reserve, but in many times we discover that they are not backed by any reserve. This leads the emerge of some company services whose their role is to issue those stablecoins and garantee the cover reserve.

There are plenty of stablecoin that expose the collateral besides the centralized ones that required some audit because the reserve is in their hand and not disclosed.

One example is resolv usd and so on. You can even see their delta neutral hedge position in hyperlane.
Some other stable also exposes their over collateralization through smart contract, so you can see it anytime.

It depends on you to choose which stablecoin is good.

[Hispo]

I don't really understand why they would do such a thing, unless there are regulators behind all this choice for these stablecoins.

It could be a plan to force people who desire to continue to use their stablecoins to move to more centralized protocols, for the sake of keeping control over users and exchanges.
Anyways, as it stands, one can only hope most of users won't fall for this and stay with stablecoins being offered in Ethereum and Tron.

In the end, the direction of Blockchain as a liberating technology depends almost exclusively on all of us...
This is very bad news... Everyone using those two stablecoins should know about this.

[NotATether]

This is retarded. If they follow through with this, then people will just move to other stablecoins on ERC-20 and TRC-20 like PYUSD, TUSD, USDD, USD1, DAI and so on. The whole point of smart contract networks is to have tokens on them, and if you kill the largest market for them then you the issuer are going to lose a lot of money as well.

[o48o]

I don't really understand why they would do such a thing, unless there are regulators behind all this choice for these stablecoins.

It could be a plan to force people who desire to continue to use their stablecoins to move to more centralized protocols, for the sake of keeping control over users and exchanges.
Anyways, as it stands, one can only hope most of users won't fall for this and stay with stablecoins being offered in Ethereum and Tron.

In the end, the direction of Blockchain as a liberating technology depends almost exclusively on all of us...
This is very bad news... Everyone using those two stablecoins should know about this.

Their own centralzed network is probably easier to control in cases of tracking, identification and freezing unwanted wallets. I mean they are already doing it, but having more control over it wouldn't be bad from their perspective.

To rest of us it just makes USDT and USDC even more of centralized corporate coins. Even if they are more accepted all around because of better regulatory compliance.

[edroi]

USDT and USDC have announced that in the future, their tokens will be used for payments only on their own networks, and that fees will be charged exclusively in their tokens.


USDC issuer Circle to launch new layer-1 Arc blockchain this year

https://cointelegraph.com/news/usdc-issuer-circle-layer-1-blockchain-arc


Tether creates ‘Stable’ blockchain built just for USDT economy
https://coingeek.com/tether-creates-stable-blockchain-built-just-for-usdt-economy/


This is likely bad news for most altcoins like Ethereum, solane ,Tron, BNB, and others, since people mainly use them for tokenized dollars

that move makes sense for the stablecoin issuers but it could really change the game.. if usdt & usdc lock users into their own blockchains then a lot of the daily activity on ethereum, tron, solana and even bnb chain could shrink since most people don’t hold those coins for themselves but just to move stablecoins around.. at the same time it might backfire because people also like having stablecoins on open networks where they can plug into defi, nfts and other tools... if they wall themselves off too much they risk losing the network effects that made them big in the first place

[Abiky]

There is a new law for stablecoins, and these companies certainly have legal advisors who know what they're doing. The situation is completely different from what it was during the Libra/Diem project.

Generally, these companies were able to freeze tokens, and they did it across multiple blockchains. However, there has been no freeze on individual addresses, and this appears to be the next step.

What do you mean by "no freeze on individual addresses"? AFAIK, stablecoin issuers such as Tether and Circle can freeze addresses on multiple blockchains via the smart contract's embedded "blacklist" feature. In other words, Tether and Circle can freeze a specific address across multiple blockchains if they want to. The only reason they're planning to make their own Blockchain networks is because they want full control over everything. A blockchain of their own would allow them to easily freeze, censor, or even confiscate funds at will. By doing such a move, they will officially become "digital banks". Perhaps, regulators in the US will allow this. But not in the EU or even BRICS. And with Tether having issues to launch its own EURO-backed stablecoin, you can imagine how EU regulators will respond.

Let banksters and "Wall Street" enjoy their centralized stablecoins. Traditional cryptocurrencies such as Bitcoin and Ethereum is where the freedom's at. Even if their prices remain unstable (volatile) in Fiat terms. If you're not into crypto for the money, this wouldn't matter. Just my two sats.

[Abiky]

This is a good thing, it further legitimises crypto in the minds of the general masses & governments. USDT & USDC are going to make the Dollar more powerful as in the modern times people will use them for trade. The fact that they are backed by the USD helps it retain its status as world reserve currency.

You think? Because it seems that the "de-dollarization" process is accelerating at a fast pace. Especially now that Trump's controversial tariffs and potential resignation of FED chairman Jerome Powell shook markets. Investors are losing confidence in the USD. It won't be long before USD-backed stablecoins such as USDT and USDC lose their luster. Perhaps, they will be replaced by EURO-backed stablecoins?

I'd be surprised if things happen the way you foretold. It would cement the US' stance as the world's leading superpower. Anyways, USDT and USDC are better off living on multiple chains instead of their own. Don't you think?

[Josefjix]

A major development. It seems that governments want to control all transactions rather than freeze certain addresses.
TRON will be severely affected by these changes, and It's good WE have DAI.

Not only TRON to be affected by it, all other chains that had been needing USDT for their transactions and I'm just hoping USDT will not disintegrate off those chain entirely but maintain the relationship then add the new chain. Moreover, if they really want a massive usage, then they going to make sure the withdrawal fee would be far more lower than usdttrc20, usdterc20 and even on TON and Solana.

[TastyChillySauce00]

A major development. It seems that governments want to control all transactions rather than freeze certain addresses.
TRON will be severely affected by these changes, and It's good WE have DAI.

Not only TRON to be affected by it, all other chains that had been needing USDT for their transactions and I'm just hoping USDT will not disintegrate off those chain entirely but maintain the relationship then add the new chain. Moreover, if they really want a massive usage, then they going to make sure the withdrawal fee would be far more lower than usdttrc20, usdterc20 and even on TON and Solana.

Although I agree, TRON will have it really bad. There's not much defi in there that could motivate people to use the chain. USDT transactions dominate the chain and stablecoin issuers creating their own network will means a huge chunk of market share for stablecoin transaction will be offloaded to there knowing that tron has been quite expensive in fee as well.
Every exchange charges 1 USDT for withdrawal in tron nowadays except maybe few.

At least other chain got big defi with billions locked up. Tron have none of that.

[Hispo]

I don't really understand why they would do such a thing, unless there are regulators behind all this choice for these stablecoins.

It could be a plan to force people who desire to continue to use their stablecoins to move to more centralized protocols, for the sake of keeping control over users and exchanges.
Anyways, as it stands, one can only hope most of users won't fall for this and stay with stablecoins being offered in Ethereum and Tron.

In the end, the direction of Blockchain as a liberating technology depends almost exclusively on all of us...
This is very bad news... Everyone using those two stablecoins should know about this.

Their own centralzed network is probably easier to control in cases of tracking, identification and freezing unwanted wallets. I mean they are already doing it, but having more control over it wouldn't be bad from their perspective.

To rest of us it just makes USDT and USDC even more of centralized corporate coins. Even if they are more accepted all around because of better regulatory compliance.

That is why I liked stablecoins which were fairly decentralized as the original concept of Dai by Makerdao was. It was over-colateralized by Ethereum and people were free to engage with the smart-contract and issue as much stablecoins as they desired, as long as they had enough Ether to give as collateral, there were no centralized power and the smart contract was open source, for anyone to see and verify, it was a step in the right direction, but people preferred to rely on centralized Fiat backed coins instead, now we could be about to see the consequences of it...
Obviously exchanges and hot wallets will asked by regulators to comply and switch all the capital of their depositors to those centralized networks, without asking the owners of the tokens.

[o48o]

That is why I liked stablecoins which were fairly decentralized as the original concept of Dai by Makerdao was. It was over-colateralized by Ethereum and people were free to engage with the smart-contract and issue as much stablecoins as they desired, as long as they had enough Ether to give as collateral, there were no centralized power and the smart contract was open source, for anyone to see and verify, it was a step in the right direction, but people preferred to rely on centralized Fiat backed coins instead, now we could be about to see the consequences of it...
Obviously exchanges and hot wallets will asked by regulators to comply and switch all the capital of their depositors to those centralized networks, without asking the owners of the tokens.

I agree with you there. Even though i see other plausible problems of purely decentralized services. One of them being need to comply with centralized services in order to be adopted, or even allowed.

And other thing i am worried about decentralized anything is potential exploits, similar to DAO hack in 2016. And more trust we place on something, bigger the fall will be if that happens.
I guess when enough people would lose money, rollback would be possibility, even though it's against the idea of blockchain being immutable.