This is more like Disney Dollars. Remember those? Disney used to print their own money, that people could “buy” 1:1 to the Dollar, that was only redeemable at their properties. The idea was that kids going to Disney could get Disney Dollars as gifts from their relatives ahead of a trip to Disney, and then they could spend it just like cash. You could never redeem it back to USD, though, just spend it on stuff. So if you had any of the scrip left over, you had to hold it until the next time.
Disney discontinued printing the scrip years ago, because gift cards do the same thing, only better. They still accept Disney Dollars, but ironically their discontinuation made them scarce and they sell for more than face value as collectibles.
This bill allows any entity to create their own crypto-enabled version of Disney Dollars, collecting real money in exchange. What happens if the entity goes out of business, or “gets hacked”? I don’t think this bill addresses any of that.
No, the Crypto part is important, because it makes it trivialize easy to issue any number of tokens (trillions? quadrillions? 2^64?) and then trade with them. Gift cards still have the limitation that you need a network to accept them, and they are commonly understood in accounting practices so retailers need to account for them.
How can we be sure that some random stablecoin is really backed by currency 1:1 like they claim? The largest stablecoin in use today is Tether, which claims to have over $100B in circulation, all “backed 1:1”. But every audit they have released has been deficient in some way. You would think with that much money in a bank somewhere people could figure out where it all is.
it makes it trivialize easy to issue any number of tokens (trillions? quadrillions? 2^64?) and then trade with them.
These are all fully visible. Gift cards we have no way of knowing how many there are.
Gift cards still have the limitation that you need a network to accept them,
Same with tokens. Only certain people will redeem certain tokens.
and they are commonly understood in accounting practices so retailers need to account for them.
Public blockchains are a triple ledger system. They are self accounting
How can we be sure that some random stablecoin is really backed by currency 1:1 like they claim?
Great question. Same with gift cards. Same with bonds.
The largest stablecoin in use today is Tether, which claims to have over $100B in circulation, all “backed 1:1”. But every audit they have released has been deficient in some way.
Oh yes. I wouldn’t touch Tether with a 12ft pole. I’m not saying stablecoins are good. I’m saying they are no different to what currently exists.
These are usually called corporate bonds. What is the fuss?
No, Bonds are regulated.
This is more like Disney Dollars. Remember those? Disney used to print their own money, that people could “buy” 1:1 to the Dollar, that was only redeemable at their properties. The idea was that kids going to Disney could get Disney Dollars as gifts from their relatives ahead of a trip to Disney, and then they could spend it just like cash. You could never redeem it back to USD, though, just spend it on stuff. So if you had any of the scrip left over, you had to hold it until the next time.
Disney discontinued printing the scrip years ago, because gift cards do the same thing, only better. They still accept Disney Dollars, but ironically their discontinuation made them scarce and they sell for more than face value as collectibles.
This bill allows any entity to create their own crypto-enabled version of Disney Dollars, collecting real money in exchange. What happens if the entity goes out of business, or “gets hacked”? I don’t think this bill addresses any of that.
Yes. Gift cards is probably a better analogy.
My main point is that this sort of thing isn’t new. The crypto part is a distraction.
No, the Crypto part is important, because it makes it trivialize easy to issue any number of tokens (trillions? quadrillions? 2^64?) and then trade with them. Gift cards still have the limitation that you need a network to accept them, and they are commonly understood in accounting practices so retailers need to account for them.
How can we be sure that some random stablecoin is really backed by currency 1:1 like they claim? The largest stablecoin in use today is Tether, which claims to have over $100B in circulation, all “backed 1:1”. But every audit they have released has been deficient in some way. You would think with that much money in a bank somewhere people could figure out where it all is.
These are all fully visible. Gift cards we have no way of knowing how many there are.
Same with tokens. Only certain people will redeem certain tokens.
Public blockchains are a triple ledger system. They are self accounting
Great question. Same with gift cards. Same with bonds.
Oh yes. I wouldn’t touch Tether with a 12ft pole. I’m not saying stablecoins are good. I’m saying they are no different to what currently exists.