So then by using this product you are de facto buying short term US debt lowering the debt costs in a way? Is that what you are describing? And Stripe makes money on that short term carry.

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asats 6 days ago | parent | next [-]

Still doesn't answer why you would need any crypto here. Why can't the USD transferred to stripe just be a record in an SQL database saying customer X has N USD in the account, and transferring that around could be done instantly at zero cost by changing an sql row.

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ENGNR 5 days ago | parent | next [-]

There are all sorts of protections around who can be a custodian of someone’s money (for good reason)

However there are use cases like running a marketplace, where the platform would like to be able to direct the flow, maybe hold things temporarily in case there are multiple transactions or to split a transaction up between different clients, before paying it out daily or weekly as a lump sum. Often it’s just to avoid fees, because the marketplace operator charges their fees in a different way (like a flat monthly invoice) and they want to assist with money logic as a service, but not be the custodian of the money.

Even just knowing that money has moved at all can be useful, without any ability to touch it, and it’s difficult to get permissions from conservative financial institutions, whereas permissionless ledgers make it easy.

Crypto can help add that nuance. It’s still your money, but you can give a third party the ability to do some things to assist you, without giving the ability to transfer it all to themself and run away with it.

	▲	grey-area 5 days ago \| parent [-]
		So, we're just going to pretend those regulations don't exist for cryptocurrencies too?

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Ekaros 6 days ago | parent | prev [-]

That sounds like banking or payment processing. Albeit with later Paypal has proven that you do not always need to return funds, but still there is regulatory history on that...

Stable coins are new enough and have not catastrophically crashed yet so there is less oversight.

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DrBrock 6 days ago | parent | next [-]

The Terra-Luna stablecoin crash wiped out $50 billion of notional value https://www.sciencedirect.com/science/article/abs/pii/S15446...

It's also a very open secret that the largest Tether stablecoin is not actually 1:1 backed with USD, as they very often claim https://paymentexpert.com/2025/07/24/tether-stablecoin-regul...

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notatoad 6 days ago | parent | prev | next [-]

so the short answer to the question of "why crypto" is just to work around regulation, to be able to act as a bank without the regulations that apply to banks?

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mondrian 6 days ago | parent [-]

Yeah and this is codified in the GENIUS act which passed recently. It enables tech companies to act like banks in certain dimensions, without being regulated like banks.

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notatoad 5 days ago | parent [-]

ah, okay, i see the part i'm missing here. the GENIUS act doesn't let "tech companies" act like banks, it specifically lets stablecoin issuers act as banks. so this is stripe's play to take advantage of that.

	▲	boringg 5 days ago \| parent [-]
		Nothing better than more financial de-regulation - I can't see that going awry.

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boringg 5 days ago | parent | prev [-]

Stable coins are new enough .... and it's in their name... Stable! :)

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mondrian 6 days ago | parent | prev [-]

Yeah. Stablecoins create demand for Treasuries which drives the price of Treasuries up and interest rate down. So this pressure lowers debt servicing cost for the US government, and Stripe is the holder of those Treasuries and gets paid interest.

This would also serve to counter the drop in global Treasury demand due to recent tariff stuff where presumably our traditional debt holders are losing appetite for US debt...

It also creates a kind of strange situation where stablecoins are basically spendable "Treasury tokens". So you give 1 USD to Uncle Sam (via a middle man like Stripe), get back 1 stablecoin. Then you go and spend the stablecoin, and Uncle Sam goes and spends the USD. It's like a weird double spend situation. Prior to stablecoins, you buy a treasury bill with USD, you hold this unspendable treasury bill while Uncle Sam gets USD to spend.

	▲	boringg 5 days ago \| parent [-]
		If the analogy you say is correct -- I think it makes sense in that its stripe that is actually the individual who is holding the treasury (short term debt) and the stablecoin user can spend it on something, and the US treasury can use the debt. At the end of the day stripe is holding the risk.