Stable coins known already to be completely centralized

[apogio]

Many people are curious about why should anyone store large amounts of stablecoins.

Because they're used for trading. Most platforms use stablecoin/coin pairs and they tend to reward users for using their native stablecoin.

[bitgolden]

Many people are curious about why should anyone store large amounts of stablecoins.

Because they're used for trading. Most platforms use stablecoin/coin pairs and they tend to reward users for using their native stablecoin.

Why though? Why not use fiat and instead use stablecoins? If we can move money around between fiat and crypto, then why ned stablecoins?

The entire reason why USDT and other stablecoins got created was so that exchanges wouldn't have to be able to connect to banks, that would give them a good legal loophole, where they do not have to follow the law of that nation regards to fiat trading, and just do the same with USDT instead.

This is why it is not a good idea and we should make sure we are not seeing the same.

[Findingnemo]

They want this to be the same as the banking system, they can simply freeze any bank account with one click and all it needs a nod from the authority. Freezing stablecoins now can be a little more complicated so they want the freezing process to be easily accessible. As a user we can only hope we will not get in the middle of any.

[o48o]

Yep, that's the thing. Government already got ahold of all the centralized chokehold in crypto space, stablecoin is no different and even exchange can freeze money without any proper reason.
I personally never concerned about my stablecoin being frozen, never heard anyone I know that got their stablecoin frozen at all for locking it in aave for more than 2+ years or even moving it between blockchain for yields.

I am not worried right now about it either, but given where US politics is going, if they move along with their agenda, they could technically just put anyone sharing anti trump memes, or pro democracy memes to be in terrorist watchlist for being antifa. Then all monetary activity would be seen as terrorist funding. It's not that far fetched when you look at other thin skinned wannabe dictators.

Obviously not all countries would be go along and FATF would probably divide for that

[dansus021]

Stable coins known already to be completely centralized from the begin I believe that Stablecoin is centralized they can froze your USDT USDC and other via smart contract and there are lot of news that talk about tornado cash is actually one of it.

There is an algorithmic stablecoin but basically they have direct collateral with fiat backed stablecoin like from tether and circle, take example is USDD from tron or hybrid stablecoin like DAI

[apogio]

Why though? Why not use fiat and instead use stablecoins? If we can move money around between fiat and crypto, then why ned stablecoins?

I believe it's because of the taxes.

In many jurisdictions, USDT is considered an "asset" and not a currency. Therefore, converting USDT to ETH is considered an asset-to-asset trade and not a buy-sell transactions.

Forex is a strict term and has a specific tax rate. But in many countries, stablecoins aren't considered money, so they don't fall into this specific category and their tax rate remains in the "grey area".

[Abiky]

I believe it's because of the taxes.

In many jurisdictions, USDT is considered an "asset" and not a currency. Therefore, converting USDT to ETH is considered an asset-to-asset trade and not a buy-sell transactions.

Forex is a strict term and has a specific tax rate. But in many countries, stablecoins aren't considered money, so they don't fall into this specific category and their tax rate remains in the "grey area".

Is that so? Who's to say stablecoins won't be taxed in the long run? In the US, USD-based stablecoins might be taxed by the government. Not in this administration, but in future ones. Since most stablecoins are centralized, doing such a thing would be a "piece of cake". Even if you use a non-custodial wallet. For decentralized stablecoins, that's another story.

Now imagine privacy-oriented decentralized stablecoins. That would be a game-changer. But now that companies are putting obstacles for developers (like Google requiring KYC on Android developers to prevent sideloading), we should expect the worse. Decentralized stablecoins and even traditional cryptocurrencies might be at risk in the long run. We'll see what happens...