I can picture the board room meeting on this one.
"Gents we have this highly volatile product and people are seeing how volitile it is . ."
"Let's call it a name with little bearing on its description"
"I know let's call it stable coin. That'll convince the skeptics"
Stable coins aren't actually that volatile, most of the movement comes from the USD/GBP exchange rate since most are tied to the USD.
This doesn't make them safe of course, you still have no protection in the event of a hack or everyone bailing all at once and causing it to crash (hence better interest rates, they are riskier) but they fluctuate much less than other crypto.
They seems a bit odd to me,if you want something stable hold fiat as it's much safer, you can make (or lose!) a lot of money playing the peaks and troughs of other crypto and you can't do that with stablecoins.
I suspect stablecoins are an early precursor to state run crypto currencies, if indeed they are the future, but if this happens why would someone want Tether or USDC rather than USD or GBP backed by the fed or BOE? (For legit reasons anyway)
why would someone want Tether or USDC rather than USD or GBP backed by the fed or BOE? (For legit reasons anyway)
-Some countries selling to FIAT is the point of taxable event and they don't want to cash out
-You are a trader and have sold one asset but don't want to purchase another volatile asset yet but want to keep the money on exchanges
-The exchange only has trading pairs denominated in stable coins
I'm using blockfi, I like the interest on crypto, and get it paid in ETH. There's a risk for sure, but I can live with it. Blockfi look a pretty well set up outfit. Of course, it could go wrong but I've read up on it, and believe the risk is worth it
The exchange only has trading pairs denominated in stable coins
I think this is the main one. No-one really prefers Tether, they just don't have much choice, once inside the crypto ecosystem.
By not allowing you to trade Fiat currency for crypto, AIUI, the exchanges avoid various regulations. Eg Binance has no official headquarters and is banned in some places. If people were using them to trade USD all around the globe, they'd need a serious compliance department and would have to abide by all sorts of Anti-Money Laundering laws etc. Think of all the admin! By making people use a token instead, they can keep things a lot more straightforward for themselves. Until they get banned by all countries. Which, the way things are going lately, might not be long...