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Why use xrp instead of stable coins?

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I imagine this question comes up quite regularly, but I didn't find anything, so pardon me.

I really like ripple and what they are doing, but I have one question. Why would institutions want to use xrp instead of using some sort of stable coin that could be used as a bridge between currencies with the same low cost and speed as xrp?

No currency is 100 % stable of course, but you know what I mean.

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2 minutes ago, iLeeT said:

Stable coins are always pegged to something (usually fiat ccy), so there's essentially a counterparty risk.

@iLeeT beat me to it.

I think the idea is that stable coins need to be "stabilised" by a third party. So if you rely on a stable coin, you are de facto involving a middle man (again).

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Let's say stable coin x=$1 USD then technically you should be able at anytime redeem the stable coin for $ 1 USD from the party that issued the stable coin. Essentially XRP could have a different value in any currency at anytime meaning if xrp= $1USD in U.S.A and 20 MXN pesos while at the same time $1 USD is = to 15 MXN pesos because of demand inequality which could essentially open up multi currency trading. AKA a human couldn't trade that in real time. Anyway I was trying to get to the point of XRP price is relative only due the demand of where it is being utilized. I often think of the idea of a stranded man with a billion dollars in cash stranded in the tundra. I would assume most people would choose to burn the cash instead of freezing to death, so the value of the cash is not valuable as a currency, but valuable as a source of fuel. I lost myself so I quite.

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Posted (edited)

There is a multitude of reasons not to use "stable coins".

First off they are based upon a non-stable "asset".

Then Central Banks will be issuing CBDC, so that will squash every stable coin.

Then the stable coins left will mostly be viewed as fiat denominated margin loans on digital assets.

I could probably go on, but I'd get too much into the market design aspects of stable coins, and why they have emerged in these markets, which is probably not the intended subject matter of this thread.

It's a pretty hard nope on stable coins, from a financial engineering perspective. May as well have JP Morgan coins, we already have bank accounts and transact most economic activity via Commercial Bank money. JP Morgan coins would be no different than a JP Morgan paper check, or swipe of a JPM debit card.

Edited by KarmaCoverage

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9 hours ago, Babelly said:

Do you not see the current mess going on with "stable coins"

What is the current mess with stable coins?

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9 hours ago, iLeeT said:

Stable coins are always pegged to something (usually fiat ccy), so there's essentially a counterparty risk.

It's quadruple counterparty risk. In case of tether:

1:You have to trust the issuer of the stablecoin (tether ltd).

2: The bank where the pegged unit is held.

3: The issuer of whatever it's pegged to (USD: FED).

And 4: the largest holder (China).

Assuming crypto is sufficiently decentralised and custody is sorted, the only current risk in crypto is the big holders. Which is a problem that should be getting smaller with adoption.

Re: Adoption. Ripple's holdings are currently XRP's biggest blessing, but also its biggest curse.

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There are different stable coins, we can't say all of them are messy. Some use only AA and AAA rated banks which are protected by the government you know

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4 minutes ago, Arenys said:

There are different stable coins, we can't say all of them are messy. Some use only AA and AAA rated banks which are protected by the government you know

That is true.... but wouldn't you say, still a mess....(generally speaking)... ?

One rotten apple can spoil the bunch.....

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1 minute ago, EcneitapLatnem said:

That is true.... but wouldn't you say, still a mess....(generally speaking)... ?

One rotten apple can spoil the bunch.....

In general, I like the idea of stable coins, but I agree that they have a looot to work on. This is just the first step which is never ideal :)

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8 minutes ago, kanaas said:


Solvability risk -> USDT debacle


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Yeah, tether brought a train of scandals...

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There are different stable coins, we can't say all of them are messy. Some use only AA and AAA rated banks which are protected by the government you know

Government protection targets clients, citizens.... doubt that they will support the banks coin


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