Either way you look at it, stablecoins are both better rails and asset than commercial bank deposits - they are cheaper, faster, global, 24/7, and remove unnecessary friction. And if you look at, say, USDC reserves (mostly treasuries or overnight repos) they are structurally better than what your commercial bank has (illiquid mortgages and similar). That said, you don't get the FDIC $250k backstop and for some that might flip the entire conversation (in particular, narrow banking/reserve quality argument doesn't apply under that cap - you are simply fully covered).
UST and the other ones were "algorithmic" stablecoins collateralized poorly -- USDC and OUSD (eg.) are collateralized under the regulation of the OCC / by USD-equivalent short-term bonds etc.
This is not to say that there can't be liquidity challenges or "black swan" events, but the current iteration of stablecoins are _comparable_ to being "made by banks" and are certainly regulated.
This is one recent paper, but with this and other personnel details (eg. Fed governors attending the last few "A Very Stable Conferences", ex-Fed people working at Circle / doing stablecoin startups) you can infer that the Fed is more pro-stablecoin than you think.
Why? Cross-border payments are hard, CBDCs are unpopular / politically infeasible, and Fedwire takes up a ton of balance sheet capacity (etc).
Meh. Money is to be operated by governments. I don’t want some company owning it.
Waiting for a new admin to launch a federal reserve coin and end all these other players.
Either way you look at it, stablecoins are both better rails and asset than commercial bank deposits - they are cheaper, faster, global, 24/7, and remove unnecessary friction. And if you look at, say, USDC reserves (mostly treasuries or overnight repos) they are structurally better than what your commercial bank has (illiquid mortgages and similar). That said, you don't get the FDIC $250k backstop and for some that might flip the entire conversation (in particular, narrow banking/reserve quality argument doesn't apply under that cap - you are simply fully covered).
This doesn't make any sense.
What happens when this thing depegs like UST and all the other unstablecoins?
This doesn't look like it is backed by anything other than a few companies.
We don't need all these unstablecoins or crypto scam coins.
We need something like FedNow or CBDCs that are completely safe, made by banks, regulated has chargeback protection and protects consumers.
UST and the other ones were "algorithmic" stablecoins collateralized poorly -- USDC and OUSD (eg.) are collateralized under the regulation of the OCC / by USD-equivalent short-term bonds etc.
This is not to say that there can't be liquidity challenges or "black swan" events, but the current iteration of stablecoins are _comparable_ to being "made by banks" and are certainly regulated.
Who would you trust? Some random company with a fickle board or the fed? I trust the fed.
https://www.federalreserve.gov/econres/notes/feds-notes/paym...
This is one recent paper, but with this and other personnel details (eg. Fed governors attending the last few "A Very Stable Conferences", ex-Fed people working at Circle / doing stablecoin startups) you can infer that the Fed is more pro-stablecoin than you think.
Why? Cross-border payments are hard, CBDCs are unpopular / politically infeasible, and Fedwire takes up a ton of balance sheet capacity (etc).