Stable coins known already to be completely centralized

[Oshosondy]

Is it possible that you are innocent and one day comes that your stable coin is frozen?

Those money laundering, terrorism financing and money stolen by hackers from platforms like exchanges exploits are seized, but I think stable coins issuers might go deeper as regulatory organizations and government are telling them to freeze more coins.

Read the news from https://decrypt.co/360087/fatf-flags-peer-to-peer-stablecoin-transfers-as-top-money-laundering-risk

FATF want stable coin issuers to implement technical measures to be able to block, freeze and withdraw stablecoins at any time if there are (intended) transactions to or from non-allow-listed or deny-listed wallets.

The Financial Action Task Force (FATF) is an independent, intergovernmental body established in 1989 (initiated by the G7) to develop policies that combat money laundering, terrorist financing, and proliferation financing. It sets international standards and assesses whether countries are taking effective action against these threats.

Without them saying these, you can see hundreds of billions of dollars that stable coins issuers have frozen.

Hope innocent people will not be targeted?

[MusaMohamed]

Is it possible that you are innocent and one day comes that your stable coin is frozen?

FATF want stable coin issuers to implement technical measures to be able to block, freeze and withdraw stablecoins at any time if there are (intended) transactions to or from non-allow-listed or deny-listed wallets.

It's not new and in years, stablecoins can be frozen in your wallets, and it's dangerous as even in your non custodial wallets. With most stablecoins, this risk exists but people either don't know about it or they ignore this risk.

PSA: Most Stablecoins Can Be Frozen, Even in Your Own Wallets.
Stablecoins and blacklists.
Stablecoin Blacklists: How They Work and Who Controls Them.

[SatoP]

Even with all the available information about Tether seizing coins, I doubt many people know that their coins can be frozen at any time. Tether has full control and decides who is innocent and who’s not. That’s the disadvantage of using centralized stable coins, it’s the same thing as leaving your coins on centralized exchanges.

[Porfirii]

That's what happens when you rely on coins that are not based on "permissionless" systems. As long as there is a centralised authority in these networks that can decide to approve or not transactions from or to certain addresses, your coins could be frozen at any time.

It is good that you posted this here in the B&H board because one of the most frequent mistakes those who start in crypto make is not understand the basic differences between coins, as if they were all the same thing that only varied in price.

Great links, btw, MusaMohamed, these are must-reads. Thanks for sharing.

[apogio]

The point of the thread can be generalized with any coin, even with Bitcoin, if it's not used as it's intended (P2P on self-hosted apps).

If you send coins to an exchange, it's effectively their money, so they can be frozen.
If you send coins to a mixer, it's their money, so they can be frozen.

In general, as long as your coins leave your self-custody, they belong (hopefully for a little time) to another entity, so... they own them.

Obviously stablecoins are notorious in this regard, but unfortunately -or fortunately-, the purpose is to trust nobody.

If you do need to trust someone, it can cause serious ramifications.

[promise444c5]

Again, governments don’t like what they can’t control and since it signals them an uncontrollable vibe, they are actively creating and adding ways to make it controllable. Tether and likes of other stable coins goes beyond just CEX.. It can be frozen from anywhere and serves as perfect vessels.

It has some advantages too but it defeat the whole purpose of decentralization, not sure a lot of people cares about that anyways.

Hope innocent people will not be targeted?

If the government decides to crack down on the crypto space starting with stablecoins that can be frozen, it won’t respect innocence in the slightest sense.

[Akbarkoe]

Again, governments don’t like what they can’t control and since it signals them an uncontrollable vibe, they are actively creating and adding ways to make it controllable. Tether and likes of other stable coins goes beyond just CEX.. It can be frozen from anywhere and serves as perfect vessels.

It has some advantages too but it defeat the whole purpose of decentralization, not sure a lot of people cares about that anyways.

Hope innocent people will not be targeted?

If the government decides to crack down on the crypto space starting with stablecoins that can be frozen, it won’t respect innocence in the slightest sense.

It's true that the government will never allow anything to be free from their control. Under the pretext of public and national security, they act to eradicate people's freedoms, especially their own.

Decentralization will only be an illusion that will never be achieved because what they fear is public freedom, so they continue to promote centralization to limit such thoughts.

Anything that smacks of decentralization will be driven to negative perceptions, characterized as less secure, rife with fraud, and so on. This is their way of stifling our desire.

I hope that in the future there will still be places to store money, but we will never be afraid of being misdirected by those who impersonate the government. Perhaps Bitcoin will indeed be the final choice, and stablecoins will only be used as a means of transaction.

[Odusko]

Stable coins are government tools to control asset's on the block chain without any interference from the owner of those coins, the thing is that government want total control and take it what their have lost to Bitcoin like self custody freedom in Bitcoin is what government don't want to happen with stable coins, since they want to be able to frozen your USDT any where at anytime the so wish, unlike Bitcoin that gives the freedom to control your assets until you transfer it to Centralised exchange then you lose control of you Bitcoin, so the difference is there and is left for us to choose wisely and approach them both with cautions.

[TastyChillySauce00]

We should acknowledge that stablecoin is a business, they're here issuing stablecoin maintaining their reserve to profit from it and for that to happen they need to follow the regulation.

If we want completely decentralization we should continue holding bitcoin or even ethereum. I honestly think the decision as to why MakerDAO decided to rebrand their DAI to USDS while also implementing built blacklist function is because they want to avoid future lawsuit regarding anti money laundering thus why most stablecoins are centralized.
Even without FATF telling the stablecoin issuer to have built in blacklist mechanism, most issuer already doing it.