Sirwin
Sirwin

SEC Hunts Stablecoins


The FUD over BUSD the stablecoin that Paxos print as a service provider for Binance has just started to settle down. Some credible rumors said the problem with BUSD will also hit USDC Circle if it goes like that.

sec%20stablecoins%20usdc.jpg

BUSD, USDC, and USDT are the centralized stablecoins you have to trust the providers contrary to decentralized stablecoins such as HBD and DAI. If you have been in the crypto ecosystem for a long time, you will remember the times when USDT was the only option available. As the number of options increased, the reliability of the stablecoins collapsed.

We all know that SEC does not like Binance's BUSD as USDT and USDC are more "regulation-friendly" stablecoins. Surprisingly, the fire hit the regulation-friendly USDC, too. Should we be scared of it?

SEC Orders as Usual

SEC insists on seeing the stablecoins as securities sold by the companies. In crypto, stablecoin issuers "create" money when there is demand from the big boys of the market. As it is easy to understand, SEC never lets such an "authority" for any group to treat like the USA in printing their own value.

Stablecoins play an important role for CBDCs as they are pushing mass adoption to higher levels without creating unsolvable issues for the central banks. The soft attitude of regulation-lover centralized issuers enables them to operate without major issues.

When it comes to USDC, things are softer than Binance.

image.png

Circle claims that USDC holds both Cash and short-dated US Treasury bonds in its reserves to perform as a stablecoin. Circle - Transparency reports provide more insight about the reserves of USDC. If you think of USDD by Justin that is backed by Tron, none of the top centralized stablecoins create a huge threat for their ecosystems excluding USDD.

image.png


Twitter User, Yano mentioned the strong ties Circle has with the other regulators, fund managers and well-known figures.


What I expect is that the war of reserve currency in the world will also impact the stablecoins and the reserve stablecoins in crypto. As Binance's CZ mentioned earlier, the USD stablecoins may not be the major stablecoins in the near future if the pressure on them gets worse. Similarly, there are some countries that do not want to use USD in their trades with other countries.

CZ argued that the US government’s recent actions against US dollar stablecoins will probably lead the global crypto industry to rely on other currencies such as the Euro, Yen, and Singapore Dollar to back stablecoins - Cointelegraph

It looks like the war is beyond crypto. All we need to have is a 100% backed stablecoin system of BUSD, USDC and USDT before they are permanently replaced by CBDCs.

How do you rate this article?

2


idiosyncratic
idiosyncratic Verified Member

Crypto-Blogger 🖊Blockchain Gamer 🎮 https://read.cash/@idiosyncratic https://noise.cash/u/idiosyncratic1 https://leofinance.io/@idiosyncratic1


Idiosyncratic Crypto
Idiosyncratic Crypto

Crypto Related Content, Technical & Fundamental Analysis, News and Foresight

Send a $0.01 microtip in crypto to the author, and earn yourself as you read!

20% to author / 80% to me.
We pay the tips from our rewards pool.