alt Hacker NewsI assume he is referring to the uptick in stablecoin adoption. USD Stable coins are US dollar-backed cryptocurrency tokens that are intended to always hold a value of $1 USD.
Stablecoins are not backed by a central bank. Instead their source of value comes from a private company that holds actual US dollars or USD-equivalent reserves (like treasury bills, etc).
Replies
> Stablecoins are not backed by a central bank. Instead their source of value comes from a private company that holds actual US dollars or USD-equivalent reserves (like treasury bills, etc).
Yes but the problem is there are already a lot of US dollars and the pandora box was opened since the end of WW2 at least.
Is the US dollar you hold in a bank outside of the US the same as the one in the US? no...
Are they all insured and backed by the Federal Reserve? absolutely not.
In a sense if you are abroad the USDC you get from Circle on a blockchain are much closer to a "real" dollar than most of us can get their hand on.
I've always wondered, how do the companies that run stablecoins make a profit? Are they buying treasury bonds?