Quote:
Originally Posted by CoachKandSportsguy
Stable coins are just lousy bank accounts…
“he thinks most USD-backed stablecoins are really just deposit accounts on which the depositor is paid no interest nor other consideration, but whose sponsor is able to generate net interest income by investing the deposited assets (typically in highly liquid and very short-duration assets), just like a typical checking account, but without FDIC insurance.”
-Morgan Stanley Research
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I get what he is saying, but it doesn't seem all that different than cash or treasuries other than the additional control by the elites.
If you have $ in an account and the market freezes, you have no access. If the bank shuts down, you have no access. Etc.
I had a TradeKing account in 2008. Their MM sweep was The Reserve Fund, one of the largest, most well-respected funds available. When the financial crisis happened, Reserve "broke the buck" (NAV no longer $1.00) and a large sum of my money was locked up for months while the mess was sorted out. How is that any different?
I will also agree with the poster who commented that a digital currency backed by a USD that doesn't itself have anything backing it, is essentially no backing.
As to the casino chip analogy, not bad, until you realize that the chips are only good as long as the casino is willing to redeem them and that you can't spend them anywhere except at that casino. Will Publix accept casino chips for bread, eggs and milk?