Not all stable coins are created equal. All stable coins ae mimicking the fiat or asset they are pegged to. I do not use them as much since I am a holder not a trader. Wherever you go in the crypto market, you may have to deal with one 80% of the time. It provides easy exchanging and the liquidity is fluid. You may never go wrong using them since they are part of the #ethereum blockchain for ease and speed of use.
HBD IS A COMMUNITY TOKEN
If you take into account Hive backed dollar, it is a stable coin working in tandem with Hive token. HBD has nothing to do with fiat currency. It is like a debt on top of Hive blockchain. If I guess it right the more HBD we have the lower value Hive could become. This is why HBD has been going through the push to keep it close to a dollar so Hive can maintain its value as well.
Other stable coin like #DAI has to do with #Ethereum stored as a collateral with consortium with maker token as well. The way it operates allow you to have #DAI by giving away Ethereum with Maker. Compared to #USDT and USDC, it is a whole ball game. These tokens need actual dollar or commercial money and others values to back their digital stable currencies.
At first it is a good practice for traders and exchange to move funds around. At least you know one USDC is a dollar minus the fees. Due to the ease of making market shift and liquidity available into the blockchain, it has become a problem for regulators. It looks like it is a good scare cause if the market collapses, the governments want to make sure the stable coins can be remitted.
Not just this part it can cascades to the real traditional market since we are all connected after all. Taking into account the whole stable coin market at $116 billion as of July, it is a balloon waiting to pop if regulations are not there. There is the control part of the situation as well. We all know how emotion can change the landscape any minute. The acceptance of crypto in the traditional market is the transition where stable coins will find a home in a bank near you sometimes in the future.
NOT ALL STABLE COINS CREATED EQUAL
The acceptance of stable coins to represent fiat currency has forced many to publish their reserves. As I mention earlier not all of the reserves in cash. You can understand why it could become a problem in the sense of the world. Monday morning you see how a rise in BTC propel many stocks associated with BTC. Same scenarios could happen if the market change direction for any reason.
One cool part of stable coins is the fact most folks parked them into DEFI or just stake them on exchange to earn interest. I think the idea of regulate stable coins will bring clarification to know where the monies are. I think stable coins and CDBC could suffer the same fate as long everyone will act on the open. Crypto in general is in the blockchain. You may not know how to do it but it is there to be seen by those with the right eyes.
When I look at the issue with the biggest stable coin per market valuation, it holds $20+ billion in commercial paper. These papers can lose value just like fiat is losing value. This is why we need real crypto with community holders instead of this arrangement. The real scare has to do with supply and demand. Everyone wonders can stable coin be redeemed for actual dollar in case of sudden mass exodus. The crypto market is showing hope to grow where the stable coins should remain the intermediary asset for liquidity.
This regulation ascension should set the stage for the approval for crypto altogether.
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Amazingly, with the news of new currencies all over the world, one need to see the full picture here to realise what happening. The acceptance of stable coin has not only stimulates positive change but also the mindset of every investor in recent years. For me i look forward for the brighter days, in the coming years.
Stable coins have its purpose.
Understanding crypto and stable coins
is a war at itself. Mimicking the dollar
just to create liquidity is a messing point where
holders are playing with the system.
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Personally I don't like stablecoins and don't use them myself. It's only giving regulators a reason to get their hands into tracking crypto networks etc. Plus who really knows if it's even backed by anything at least with Bitcoin etc we know it's real vested money.
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Learning about them is truly
the opposite of what crypto should
be. Stable coins fit a purpose that
bring liquidity to whale.
!BEER
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BEER.then we must reduce our number of #HBD so that the price of #Hive is maintained is that what more or less tries to explain us
It is on the making for that to happen.
HBD at a dollar value give holders a way
to get liquidity while Hive remains powered
to secure the blockchain.
!BEER
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thanks for the explanation friend and for the importance of the Hive blockchain
Hive is the easiest blockchain to understand for one reason. You are part of a community where you bring your time and you can earn Hive for the time spent. Only time is the real investment to start with Hive.
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BEER.Doesn't regulation defeat the whole purpose of crypto though; even though you make a very good point