I have just read an article on Coindesk about stablecoins (https://www.coindesk.com/stablecoins-will-do-more-than-just-reduce-crypto-price-volatility/) and I decided to write this post.
I actually like stablecoins a lot because they are a key piece of crypto environment that have helped operate here and achieve the goals I set.
I work as an ICO copywriter. Before, I used to ask for payments on Paypal but now I work almost exclusively via cryptocurrency. I receive payments on various dates. On Mondays, I convert all the payments I've received to my BTC and ETH wallets to USDT. On the first day of every month, I ask my friend from Moscow to covert USDT into cash.
This methods has enabled me to win from convenience and expediency that crypto markets bring to the table, while also mitigating any negative effects from heightened volatility here.
I have advised all my colleagues to start using this technique and described the benefits it brings.
I also have a couple of friends who provide English tutoring to people all over the world. When you work with people from Russia, Japan, Korea, Vietnam, Brazil, then Paypal might not be the best option. Why? Well, because people that have office jobs don't use Paypal that much and this can create an additional friction to transactions.
Naturally, cryptocurrencies are even a more novel concepts and onboarding is a huge task for everybody here.
However, as compared to Paypal, using cryptos to transfer value is complex and complicated more in terms of tech behind it rather than tax and compliance repercussions.
Yeap, a person who's constantly sending money to people from Russia to all over the world will generally become a subject of interest to all kinds of law enforcement entities. And it doesn't matter whether she uses Paypal or another service.
Physically exchanging cash to crypto can be a boon, opening the way for freerer, faster and more "relaxed" transactions.
Tether
Naturally, Tether has seen major controversies with regard to its operations. However, there's a lot of people using it every day in order hedge their investments and shield against volatility. This means that it's not a scam per se but a "grayer" business model.
And, importantly, the documents uncovered by Wikileaks clearly showed and Bitfinex and Tether is the same team. This means that people behind Tether haven't been trying to scam crypto community out of their money but, rather, it has been adjusting to the existing circumstance the way those people decided it was to be done.
It's a well-known fact that many digital monies of the past decades became the targets for governments with enforcement orders being issued and assets being seized. The main rationale for such fervor is the fact that such systems become the perfect breeding grounds for all sorts of illicit activities when hiding from law is a key component for success.
So, it's quite conceivable that Binance/Tether team has just been trying to avoid the pressure from government officials being placed on the banks and other financial intermediaries with whom Tether works. Cloaking the partners banks might be the only strategy that is capable to help Tether survive long term.
Thus, when the auditor was fired in December, the main reason might have been the unwillingness by the team to disclose the names of the partners banks as compared to a desire to scam people out of their money.
Anyway, USD has nothing behind it after it was decoupled from gold. It's just about the trust in the US government. Which is not to say that it's all one big scam. The US government has been doing an excellent job when compared to authorities in countries like Russia or Venezuela.
With Tether, it's not even about the trust into some entities, like authorities or persons, but it's just the trust into the code which enables one Tether to be equal to one USD.
And with regard to the controversies concerning the absence of the cash that was used to buy Tether and the possibility that the team has actually been doing good-ol' fractional banking, I am not sure that it's such a big thing. So what? Every central bank has been doing this for centuries and the economies have still been able to prosper, people have still been able to move up career ladders. The standards of live have generally improved. Maybe, it's not such a big thing. In return, you get a great USD-mirror and you can use it to move forward with your goals.
So, I think that it's not OK to fixate on problems of particular systems that we use, be it in real economics or cryptonomics. Just find the most popular system, use it to achieve your goals and move on with your own strategy.
In this regard, I would like to ask you as to whether you are using any other stablecoins and why you do that?
Bitfinex is the exchange in collusion with Tether, not Binance. But yes, stablecoins are an important part of the ecosystem. How they keep their price stable is still a mystery that requires much more explanation. How would you attempt to peg a stable price to something?
I changed from Binance to Bitfinex. Sorry )))
Cryptofinance, I answered your question by writing out an exploded post here - https://steemit.com/cryptocurrency/@andrew-golyanov/why-i-don-t-care-about-the-type-of-stablecoin-i-use