How Safe Are Stablecoins? Let's Talk Risk and Trust

[Sambitcoin01]

With stablecoins becoming more known especially USDT, USDC, and BUSD and have been thinking: how safe are they? 

We use them for quick transfer, avoiding volatility, and holding amounts, but most of them are centralized. that means your funds can be frozen, blocked, or even seized without warning.

Are we trading freedom for convenience?
Can we actually trust these platforms or are we just one step away from losing control?

Would love to hear your thoughts let's discuss.

[BlackBoss_]

With stablecoins becoming more known especially USDT, USDC, and BUSD and have been thinking: how safe are they? 

We use them for quick transfer, avoiding volatility, and holding amounts, but most of them are centralized. that means your funds can be frozen, blocked, or even seized without warning.

Are we trading freedom for convenience?
Can we actually trust these platforms or are we just one step away from losing control?

If you have money, the highest priority is securing it. If you can keep your money safe, you do a best thing. As if you don't lose your money, you will always have opportunities to do something with it, the safe things, and get profit from it.

If you can not secure your money, you will have nothing to do, no profit.

Stablecoins are risky.
Depeg.
Fund freeze in your non custodial wallet.
They are risks when you store stablecoins in your non custodial wallets but if you store it on any online platform for staking, liquidity adding, and anything else, you no longer control your stablecoin fund and these websites can steal your stablecoin if they are scammers.
PSA: Most Stablecoins Can Be Frozen, Even in Your Own Wallets

[Cookdata]

With stablecoins becoming more known especially USDT, USDC, and BUSD and have been thinking: how safe are they?  

Busd has been discontinue and no longer available for minting, I hope you see the first risk!

We use them for quick transfer, avoiding volatility, and holding amounts, but most of them are centralized. that means your funds can be frozen, blocked, or even seized without warning.

Are we trading freedom for convenience?
Can we actually trust these platforms or are we just one step away from losing control?

Would love to hear your thoughts let's discuss.

If you must hold a stable coin for some time, use DAI stable coin. All other stable coins has their rules and policy, they can lock your coin and there is nothing you can do to appeal for the release. Tether is known for this.

[Somegory]

Stable coins are not safe, if anything extremely bad is going to happen in this crypto space let USDT go down for a very reason and see what will happen, the market will freak out, many people will lose money but the chance is very slim but still very possible, just know that you are taking a risk storing money in USDT and USDC.

And for your information make sure your money is not from illegal sources, this makes the blocking or seizing of your stable coin very easy.

[Die_empty]

Would love to hear your thoughts let's discuss.

How are we sure that these stablecoins are fully collateralized? Some of these issuing companies have not subjected themselves to independent audits. Without regular audits confirming that they have the assets they claim might be difficult. These stablecoins should not be held like Bitcoin. They should be used as fiat because it is risky to keep them. I would prefer to hold a volatile but less risky coin over stablecoins, which can be frozen at will.   

[FirmWars]

Let's talk about the risk like you said, it is centralized and therefore your USDT, USDC and BUSD can be locked out in your address for reasons best known to the contract owners. The next risk is de-pegging which is going to cause the coin to lose their original value that was stated by the owners, there is also another risk like operational issues and the common operational risk is hacks and smart contract bug. TerraUSD collapsed and before it finally died, we saw how the problem started, first the original value of the coin dropped and when the owner was asked why, be lied but at last, the coin died.

What about Tether that has locked so many users coin? You can read my quote.

At the time of writing, Tether's blacklist includes 5131 addresses (2816 in Tron and 2314 in Ethereum), with a total frozen amount of $3.027 billion ($1.371 billion in Tron and $1.656 billion in Ethereum).
The chart below illustrates how both the volume of blocked funds and the number of blocked wallets have increased recently.

[Su-asa]

When dealing with crypto currency, the most important thing to consider is your security and not your convenience. Although, you should also consider convenience too but your security should be more so that you don't end up losing what you have taken much time to achieve. However, for your safety purpose, I don't think keeping your assets in a stable coin is safe because anything might happen at anytime, the only time you should keep your asset on a stable coin is when you know it won't take long for you to exchange them to fiat or Bitcoin.

[TastyChillySauce00]

Would love to hear your thoughts let's discuss.

How are we sure that these stablecoins are fully collateralized? Some of these issuing companies have not subjected themselves to independent audits. Without regular audits confirming that they have the assets they claim might be difficult. These stablecoins should not be held like Bitcoin. They should be used as fiat because it is risky to keep them. I would prefer to hold a volatile but less risky coin over stablecoins, which can be frozen at will.    

The compliance stablecoins routinely disclose their audit.

Some example :
https://www.circle.com/transparency
https://www.paxos.com/pyusd-transparency
https://www.paxos.com/regulation-and-transparency/

You can see all the audit reports there to figure out if they are fully collateralized or not. Some stablecoin that backs their peg with on chain asset also link their on chain addresses that hold the reserve and they are usually over collateralized to maintain liquidity for redeem, etc.
Recent GENIUS act has forced majority of stablecoin to audit by monthly basis as well. The only risk is if they blacklist your stablecoin without any reason.

If a stablecoin didn't want to disclose audit, it means they're shitty stablecoin.

[Rubuchi]

Stable coins are not safe, if anything extremely bad is going to happen in this crypto space let USDT go down for a very reason and see what will happen, the market will freak out, many people will lose money but the chance is very slim but still very possible, just know that you are taking a risk storing money in USDT and USDC.

And for your information make sure your money is not from illegal sources, this makes the blocking or seizing of your stable coin very easy.

are you sure stable coins are not safe. I thought they are the safest you can keep your funds without expecting any significant change in price over a short period of time especially the popular and reliable ones we already know. If you say the stable coins are not safe, does it mean that they can’t be held for a while before you make the next decision to use the funds for or that they disappear with your assets stored in them?

[JeffBrad12]

Can't really answer your question if we never get to know the rate of people getting frozen mistakenly vs the one getting frozen because they did harmful thing.
If 99% or more of the frozen fund are coming from illegal activity, if you do nothing illegal odds are your money gonna be safe. These stablecoin aren't gonna just lock everyone's money because their entire business build on top of trust.