Stablecoins are way more dangerous than people think

TL:DR stablecoins have single point of failure that actual currency like USD doesn’t have.

Demand for USD is very high, infact about 70% of world commerce relies upon it but stablecoins are not the answer because you are not getting paid for the risk of all stablecoins collapsing at the same time.

This is a fairly common occurrence in crypto when bitcoin goes down, altcoins go down more and likewise but with stablecoins it is so much worse. Defi companies take your bitcoins and turn them into stable USD coins then offer an interest rate but they are effectively shadow banking and are on the wrong side of regulation. BILLIONS of reserves are held in single point of failure USD accounts and the risk to reward ratio is way off given your 1 of now 20 stable coins could fall victim to a MTGox style crash…

Why would any rational person hold a stablecoin when if everything is above board they could just hold the real thing, in this case USD. Sure if you are new to the game or have a criminal record flying to the US to setup a bank account is not an option and I can understand but those are high risk options, running in front of the bus instead of sitting comfortably on the bus. As soon as you run out of energy the bus will run you over if you believe in crypto so much but any benefit you would be entitled to would have been just as easy with real USDs.

Dematerialization is one argument but what you are doing is VERY frownd upon by the powers that be and you are better sticking purely crypto if you are that camp.

/End rant

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