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| ▲ | rhubarbtree 6 days ago | parent | next [-] |
| In this scenario, what happens when there’s a run on a stablecoin? The bonds are sold en masse, and the value of those bonds will be hit, driving up gov borrowing costs (plus they just lost a source of demand), meaning the stablecoin “bank” could be bankrupt, right? With stable coins you’re really trusting a private company to invest your money in a way that is robust to a drop in confidence. Isn’t this high risk? If a coin gets large enough, is it a threat to government solvency? |
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| ▲ | brunohaid 6 days ago | parent [-] | | I’m sure the current administration will put prudent oversight in place for that not to happen. But I guess we will find out in a 2027 Bessent presser announcing the Fed stepping in. More serious answer: the bigger risk is trusting SV types to be content with a couple of percent in spread, and not starting to pull all kind of shenanigans to juice returns to a point where it becomes much harder to bail them out vs just taking back the treasuries. US government solvency seems, as crazy as it sounds, less of an issue, as evidenced by the brief tantrums with absolutely no real effects beyond a couple of protesting headlines in the recent months. Where else are people around the world going to put their money? But as gifted as the current gov crew is at turning privilege into disaster, we're probably going to find out soon enough if there are any actual limits to that. |
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| ▲ | m00dy 6 days ago | parent | prev | next [-] |
| First, Cocaine prices are way too expensive in Australia Second, Tether is not a regulated stablecoin in United States. |
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| ▲ | observationist 6 days ago | parent | next [-] | | You might be onto something here...
Make Australian Cocaine Cheap Again | |
| ▲ | brunohaid 6 days ago | parent | prev [-] | | But they promised on their kitchen counter anyway?!? | | |
| ▲ | m00dy 6 days ago | parent [-] | | I'm not sure who promised what, best kitchen I've ever heard is in Brussels. Best quality/price ratio. Those EU diplomats are all on coke. | | |
| ▲ | brunohaid 6 days ago | parent [-] | | Normally not too much sympathy for the 7 or so 'sober' ECB folks, but I do not envy them for having to endure their hyped up CBDC colleagues at Robert Johnson at 3am… |
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| ▲ | adastra22 6 days ago | parent | prev [-] |
| Thank you for providing an actual answer! I don't know what to think of it--it seems naïve to say the least. But it is at least a self-consistent answer that helps me better understand what people mean when they say stuff like that. |
