Centralized stablecoins like USDT and USDC aren't layer-one cryptocurrencies like Bitcoin or Ethereum. They're more like applications running on top of other blockchains, usually as smart contracts, and their issuers hold admin keys which can freeze, mint, burn, and otherwise redistribute funds at will. As far as timing goes, stablecoin issuers can't actually cancel or reverse a transaction that's already in a block that's been mined, but they can freeze the receiving address afterward and burn the funds there, then reissue them elsewhere, which has much the same effect.
replyAt which point they might as well use a database to keep track of the money, like banks do, and drop the cryptocurrency aspect, which was only ever a fig-leaf to keep regulators away.
replyThat sounds interesting. How is that different from a bank? What are the advantages and disadvantages compared with a traditional bank?
replyIf traditional banking is available to you, then I don't think that there are any significant advantages. But lots of people—notably those in countries with unstable currencies [0]—don't have access to high-quality banking, so for them, stablecoins can be an acceptable substitute in some cases. It's probably not a great idea to hold stablecoins long-term (there's always a risk of the sponsoring company going under, and unlike bonds they don't pay interest), but it should be fairly safe to use them for transfers, since the transfers are quick enough that there are very low odds of the company becoming insolvent while the transfer is underway.
replyIt's much easier to ban or regulate cryptocurrencies than it is paper cash and brick-and-mortar banks.
replyIts a weird loophole or so.
replyYou take 1 $ from someone and give them a token, now you have money the other not. In theory you need to make sure you keep the 1$ but you want to pay people and you are greedy so you invest it and suddenly everyone is broke.
That's not a loophole: that's literally the way fractional deposit traditional banking works.
replyThe only difference is regulations -- banks have them; things labelled crypto don't (in the US).
Thats not the same. The banking system doesn't just has regulations, it also has the state behind it.
replyAnd its a second layer: fractional deposit ONTO fractional deposit.
It’s completely unregulated and they can print infinite money.
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