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147 sats \ 4 replies \ @k00b 8h \ on: The truth behind "stable" coins econ
Why are we so confident that stablecoins won't evolve to have fractional reserves? Does the current legislation regulate them so?
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128 sats \ 1 reply \ @byzantine OP 8h
seems like rehypothecation is not permitted but even if eventually fractionally reserved the issuance originates from treasury debt rather than Fed Notes and bank lending.
Their origination will be a direct competitor to bank dollar ledger money.
For example, get a house loan in USDC, the interest rate is set by the bank and the creation of the USDC that the bank loans you is backed by US treasury debt rather than the banks balance sheet (which is backed by federal reserve bank reserves)
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10 sats \ 0 replies \ @optimism 6h
That's true. So now I call it anything different than a stablecoin and i can do fractional reserve? Call it a meme coin. JPMlulzcoin to the moon.
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50 sats \ 1 reply \ @Undisciplined 8h
I was assuming fractional reserve banking would occur on top of stable coins. There’s still no reserve requirement for banks, so why would they constrain their lending to the stable coins in reserve?
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0 sats \ 0 replies \ @Solomonsatoshi 6h
Being a member bank of the FED enables you to create bank ledger money which is IOUs for the physical FED notes.
It does not give you the power to create bank ledger versions of stablecoins.
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