Altcoins Talks - Cryptocurrency Forum
Cryptocurrency Ecosystem => Stable Coins Forum => Topic started by: Bobcrypto on December 11, 2024, 10:28:26 AM
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One of the commonest concerns for stable coins, especially the Fiat backed stable coins out there is their continuity potentials and strengths. Stable coins faces some drawbacks like the Centralization risks and regulatory uncertainty.
Centralization of stable coins means that businesses must trust these issuers. Issuers had claimed that they have reserved funds and can redeem the stable coin when the need arises. I think that transparency may also be a problem for Stable coins issuers.
Regulations of the crypto ecosystem is still lingering and stable coins may face strick rules in certain regions that could hinder their wider adoptions.
Now, besides all this issues or drawbacks, what are the benefits of stable coins? let discuss.
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When the crypto industry starts facing regulations, the stable coins like USDT and USDC will be first to be either affected or adopted into such system.
One benefit I enjoy about the stable coins (USDT to be precise) mostly is the fact that storing my native fiat currency in it keeps the value and when the native currency depreciate, the value in USDT yields more profit. So, with it, I have no issues of depreciation against my native currency.
Using it in trading is also interesting as it has more pairs than any other coins in the market.
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When the crypto industry starts facing regulations, the stable coins like USDT and USDC will be first to be either affected or adopted into such system.
One benefit I enjoy about the stable coins (USDT to be precise) mostly is the fact that storing my native fiat currency in it keeps the value and when the native currency depreciate, the value in USDT yields more profit. So, with it, I have no issues of depreciation against my native currency.
Using it in trading is also interesting as it has more pairs than any other coins in the market.
This is a great advantage, especially for people who live in countries where the fiat currency depreciates against the dollar, which is exactly my situation
With the opportunity to hold USDT for example, I was able not to lose purchasing power because of the high inflation in my country and the devaluation of the currency
What's more, it's a good opportunity to put money into DeFi to earn an income rather than just leaving it idle, and have free access to any protocol, without any permission or KYC
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I would not recommend anyone to hold USDT or any other stable coins for long term storage.
There is a lot of risks that can quickly cause those tokens to lose value because of ban and regulation issues, this especially applies for Tether.
I noticed that USDT peg is not good now and many people are selling their tokens for lower value.
Tether even invested in totally different regulated stablecoin because of EU mica regulations, so expect big changes in 2025.
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The main drawback is that you may not trust these stablecoins as an alternative to the dollar or a long-term investment. They are just accounting tools to fix your profits in US dollars instead of converting them to cash, which takes a lot of time.
I do not recommend using an unknown stablecoins, especially in a rising market. There is a high probability of its collapse.
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I would not recommend anyone to hold USDT or any other stable coins for long term storage.
There is a lot of risks that can quickly cause those tokens to lose value because of ban and regulation issues, this especially applies for Tether.
I noticed that USDT peg is not good now and many people are selling their tokens for lower value.
Tether even invested in totally different regulated stablecoin because of EU mica regulations, so expect big changes in 2025.
We can mitigate the risks by being attentive to market news, especially with Tether and its USDT
USDC is also a good option for holding your cryptos in dollars, USDC is backed by Circle
The big challenge is not to go back to fiat due to the various unfair or unjust regulations that may exist in the country, and also the ease of buying crypto again at another opportune moment
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I know that in some wallets, like Coinbase Wallet, you can earn interest just by HODLing USDC. It's something that could make you money just by holding that. Of course, it wouldn't be as much as trading it and getting a profit, but it could be a hedge towards the market. Make sure that you have your profits or something from the bull market. You must know who backs your stablecoin because you might get into the wrong one and lose money.
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One of the commonest concerns for stable coins, especially the Fiat backed stable coins out there is their continuity potentials and strengths. Stable coins faces some drawbacks like the Centralization risks and regulatory uncertainty.
Centralization of stable coins means that businesses must trust these issuers. Issuers had claimed that they have reserved funds and can redeem the stable coin when the need arises. I think that transparency may also be a problem for Stable coins issuers.
Regulations of the crypto ecosystem is still lingering and stable coins may face strick rules in certain regions that could hinder their wider adoptions.
Now, besides all this issues or drawbacks, what are the benefits of stable coins? let discuss.
Stablecoin is created to enhance market liquidity by lowering the barrier for investors in evaluating investment performance as they are accustomed to valuing everything in fiat. Additionally, stablecoin is a way for new investors to easily enter the crypto market, and for old investors to take refuge during periods of high market volatility.
In many countries, stablecoins such as USDT and USDC are the only way for people to access foreign currency and avoid the devaluation of the domestic currency against the US$. I also hold USDT throughout the crypto winter to be ready to DCA BTC & ALTs. I have more faith in Tether than our banks ^^
Currently, stablecoins that share revenue like Ethena USDe are attracting the attention of the community. I think that they will continue to be a hot topic in this bullrun, especially in 2026-2027!
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With the opportunity to hold USDT for example, I was able not to lose purchasing power because of the high inflation in my country and the devaluation of the currency
You still lose purchasing power because the USD also loses, so why not keep your funds in BTC.
I see trusting a company in an offshore country that might block your funds with a click as a really dangerous situation, far worse than just buying USD on the black market.
In many countries, stablecoins such as USDT and USDC are the only way for people to access foreign currency and avoid the devaluation of the domestic currency against the US$. I also hold USDT throughout the crypto winter to be ready to DCA BTC & ALTs. I have more faith in Tether than our banks ^^
I always found it funny that most of the ones that use USD as a safenet come from countries that brag all day about de-dollarization and the death of the dollar, yet I see nobody trading any kind of token paired with the yuan, rial, rupee or ruble.
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You still lose purchasing power because the USD also loses, so why not keep your funds in BTC.
I see trusting a company in an offshore country that might block your funds with a click as a really dangerous situation, far worse than just buying USD on the black market.
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I think it's very important to always have some USD (it can be USDT or USDC)
BTC is my main asset
It's not as if I had USDT and left it idle for years
I use it for DeFi and I always keep an eye on the market, but I know the risks of Tether or another centralized company
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I always found it funny that most of the ones that use USD as a safenet come from countries that brag all day about de-dollarization and the death of the dollar, yet I see nobody trading any kind of token paired with the yuan, rial, rupee or ruble.
I don't live in countries with governments that want to de-dollarize, so I can't fully understand the specific context that drives their citizens to use USDT. My government always tries to prevent people from owning and holding $US. We can never withdraw $US from our bank accounts and don't receive any interest, even 0.0001%. We even have to pay fees to maintain foreign currency accounts ^^
USDT is the simplest way for us to protect the value of our assets against the devaluation of our local currency. I'm not very interested in stablecoins backed by other fiat currencies because they're not as well-known as USDT and USDC. This is a success for the US for making the $US widely accepted globally, which in turn makes stablecoins pegged to the US dollar more familiar and attractive.
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My government always tries to prevent people from owning and holding $US. We can never withdraw $US from our bank accounts and don't receive any interest, even 0.0001%. We even have to pay fees to maintain foreign currency accounts ^^
Because letting people buy USD or any other currency unrestricted will diminish the value of your own, if everyone wants to buy $ but probably not even one hundred foreigners are interested in buying your denomination the exchange rate will probably go up by 10% a day ;D This will make more people want to buy USDT which will trigger another devaluation and, this is the reason.
I think it's very important to always have some USD (it can be USDT or USDC)
I can wire euros to most exchanges in under an hour here with zero fees, not even talking about CC purchases, sorry but I trust my bank more than tether.
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I think it's very important to always have some USD (it can be USDT or USDC)
I can wire euros to most exchanges in under an hour here with zero fees, not even talking about CC purchases, sorry but I trust my bank more than tether.
To be honest I trust more in Tether than banks of my country ;D ;D ;D
The correct and ideal thing is not to trust either of them
The best solution is always BTC with your custodian
tether and banks can block your funds, but in my country it's easier for a bank to block you than tether
There's a lot of talk about Tether and a possible block because it follows the law, but in practice, how many people have been affected by Tether?
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We can mitigate the risks by being attentive to market news, especially with Tether and its USDT
USDC is also a good option for holding your cryptos in dollars, USDC is backed by Circle
This is not mitigating the risks at all.
All the news you are reading are delayed reaction from the market, so you won't even have the time to react when USDT or some other stablecoin goes to zero.
It's not like this didn't happen already with several different coins, tokens and even smaller stablecoins.
I am not saying that fiat currencies are rock stable also, same could happen with them, and probably will happen to push people into CBDC.
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We can mitigate the risks by being attentive to market news, especially with Tether and its USDT
USDC is also a good option for holding your cryptos in dollars, USDC is backed by Circle
This is not mitigating the risks at all.
All the news you are reading are delayed reaction from the market, so you won't even have the time to react when USDT or some other stablecoin goes to zero.
It's not like this didn't happen already with several different coins, tokens and even smaller stablecoins.
I am not saying that fiat currencies are rock stable also, same could happen with them, and probably will happen to push people into CBDC.
What would be a way to mitigate the risks in your opinion or experience?
If we use the exchanges' fiat currency, for example, our money stays on the exchange, with the risk of it also being hacked or confiscated.
What's more, fiat on exchanges can generate excessive tax events depending on the country, this is a bad thing
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Stable coins save lot of time and some money too, the potential risks outweigh it's rewards but some people simply choose to take the risk. Stable coins offered ways for traders to keep their liquidity ready in the exchange itself instead of moving their fiat back and forth to their bank account every time because the bank transfers can take hours or even days depending on many factors.
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What would be a way to mitigate the risks in your opinion or experience?
Not using stable coins at all, or using them only temporary for swapping, not for holding... that would be mitigation.
If we use the exchanges' fiat currency, for example, our money stays on the exchange, with the risk of it also being hacked or confiscated.
What's more, fiat on exchanges can generate excessive tax events depending on the country, this is a bad thing
Than use your bank accounts and fiat money or even better just use cash with p2p trading, you can even do that with decentralized exchanges, so nobody can seize coins from you or shut down any accounts.
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Than use your bank accounts and fiat money or even better just use cash with p2p trading, you can even do that with decentralized exchanges, so nobody can seize coins from you or shut down any accounts.
I understand your point, but this is not a reality for me, I can't go back to fiat a lot of times because this can trigger taxes events in my country
I only return to fiat when I've sold some profit that I need to use, and that's very few times during a year for example
In the recent past, some banks closed accounts of users who moved money from cryptos, unfortunately :P
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I understand your point, but this is not a reality for me, I can't go back to fiat a lot of times because this can trigger taxes events in my country
I only return to fiat when I've sold some profit that I need to use, and that's very few times during a year for example
You can do it if you use cash in your p2p trading, that won't trigger anything anywhere, but you probably prefer easy convenient way.
If people think about resisting upcoming CBDC slavery money they should start using cash a lot more than they are doing it now.
Stable coins are also the part of the problem.
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With the opportunity to hold USDT for example, I was able not to lose purchasing power because of the high inflation in my country and the devaluation of the currency
You still lose purchasing power because the USD also loses, so why not keep your funds in BTC.
I see trusting a company in an offshore country that might block your funds with a click as a really dangerous situation, far worse than just buying USD on the black market.
In many countries, stablecoins such as USDT and USDC are the only way for people to access foreign currency and avoid the devaluation of the domestic currency against the US$. I also hold USDT throughout the crypto winter to be ready to DCA BTC & ALTs. I have more faith in Tether than our banks ^^
I always found it funny that most of the ones that use USD as a safenet come from countries that brag all day about de-dollarization and the death of the dollar, yet I see nobody trading any kind of token paired with the yuan, rial, rupee or ruble.
It is almost a normal trends to keep reserve funds in stable coins waiting for the market to go dip or some corrections to take a positions. I am not against the idea of leaving funds on Btc, but I think that we can keep some stable coins to accumulate more bitcoin when prices goes dip or on a very volatile situation.
Stable coin act like a back up coins with faits to exchange crypto coins on the event of a bearish situations. Keeping all fund on bitcoin, in my opinion, is unsafe considering the facts that, at some points, traders/investors will definitely taking profits, and bitcoin must have to be paired with Fiats backed currencies like USDT, USDC for effective profit taking.
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It is almost a normal trends to keep reserve funds in stable coins waiting for the market to go dip or some corrections to take a positions. I am not against the idea of leaving funds on Btc, but I think that we can keep some stable coins to accumulate more bitcoin when prices goes dip or on a very volatile situation.
Stable coin act like a back up coins with faits to exchange crypto coins on the event of a bearish situations. Keeping all fund on bitcoin, in my opinion, is unsafe considering the facts that, at some points, traders/investors will definitely taking profits, and bitcoin must have to be paired with Fiats backed currencies like USDT, USDC for effective profit taking.
I have also mentioned the value of stablecoins as a store of value during periods of high market volatility to protect investors assets or take advantage of opportunities to buy more tokens during flash dumps. Investors can hold fiat then buy stablecoin, but P2P trading sometimes faces many time constraints.
Many investors share that they always hold at least 10-20% of their account value in stablecoins to effectively manage risk when participating in the market. I do DCA, so the percentage of stablecoins will decrease in the long term and honestly, sometimes I don't have any stablecoins left in my account to invest in an interesting and potential project @@
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One of the commonest concerns for stable coins, especially the Fiat backed stable coins out there is their continuity potentials and strengths. Stable coins faces some drawbacks like the Centralization risks and regulatory uncertainty.
Centralization of stable coins means that businesses must trust these issuers. Issuers had claimed that they have reserved funds and can redeem the stable coin when the need arises. I think that transparency may also be a problem for Stable coins issuers.
The advantages and disadvantages of making use of stable coins are quite relatively. Basically they were created to eliminate the effects of volatility thar results in either upward or downward price shifts. Now everyone likes to have a huge upward pressure for an asset they Hodl right? Now this is where stable coins become of disadvantage.
The advantage is obviously the opposite. Sometimes there arise cases where people try dealing with fiat but still want it on the digital block chain and that's another example where stable coins become important.
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For OP who made this post more discussion, I have a few arguments why stable coins are needed, namely because the coins are stable with the original US Dollar.
Bitcoin, Ethereum and Solana prices are very unreasonable because every hour, minute and second changes quickly so for people who feel they have heart disease, don't trade crypto.
Stable coins like USDT are definitely needed by those who trade or invest in crypto every day because stable coins are a way to double capital or not profit.
Is OP still hesitant about stable coins if there is a Bullish and no Take Profit, while when Bearish does not stock USDT?
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- Field industry of the crypto space for me these stablecoins like USDT and USDC are very helpful not only to me but also to other crypto enthusiasts because of converting crypto profit to our fiat, these stablecoins are really a big deal.
Just like this it is very useful in p2p features on exchanges particularly on the cex platform, besides this when we are sure that a coin like bitcoin is going to fall we can convert our bitcoin to stablecoins so that its value remains the same instead of its value going down. These are just some of the advantages of stablecoins.