[HN Gopher] Big banks explore venturing into crypto world togeth...
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Big banks explore venturing into crypto world together with joint
stablecoin
Author : wslh
Score : 72 points
Date : 2025-05-23 17:34 UTC (3 days ago)
(HTM) web link (www.wsj.com)
(TXT) w3m dump (www.wsj.com)
| wslh wrote:
| https://archive.is/Sm2ma
| nailer wrote:
| This feels inevitable. Right now stables are dominated by Circle
| and Tether (depending whether you're inside or outside the US),
| with a little PayPal, Sky and other orgs. USDT isn't
| headquartered in the US, banks don't want to assist
| paxos/coinbase (Circle) and if retail banks can now hold and
| stake tokens they'll probably want their own stablecoin.
| matthewdgreen wrote:
| The question is whether the banks actually find uses for their
| own stablecoin, or if it just becomes another thing deployed
| into the crypto ecosystem.
| tonyhart7 wrote:
| "The question is whether the banks actually find uses for
| their own stablecoin"
|
| if they start buying and Pumping bitcoin, it would be so
| funny
| crawsome wrote:
| You thought banks laundered money to druglords and dictators,
| before? just wait until they have their own currency.
| metalman wrote:
| yes,that, and something else has got there attention in the
| apearance of a new demographic, who remember bieng in a bank
| once as a child with a parent, do have online banking, that is
| only used to cash out random deposits from all over, live in
| upscale areas, debit/credit purchases limited to essentials,
| and can be heard laughing about how quaint money and banks are
| in almost any hipster coffee shop anywhere. relevance, and the
| future proofing of that likely that a significant number of
| bank employies have the bulk of there portfolio.....elsewhere
| hanniabu wrote:
| How far we've come from HN shouting blockchain has no usecase
| abxyz wrote:
| What exactly are blockchains being used for in the real world?
|
| Specific to this story: most of the world has instant payments
| without using blockchains or stablecoins, it's only the U.S.
| where the banking system somehow hasn't realised they can do
| instant payments using traditional banking technology.
|
| Anyone posting that they're skeptical about the use cases for
| blockchains on HN 10 years ago will have the same skepticism
| now. Nothing has changed.
| sebstefan wrote:
| >Banks see an opportunity for stablecoins to speed up more
| routine transactions, such as cross-border payments that can
| take days in the traditional payments system
|
| Nothing that crypto is needed for
| specialist wrote:
| Blockchain (shared tamper-evident ledgers) has many, many use
| cases.
|
| Cryptocurrency has just one.
| smeej wrote:
| Ask the U.S. how important it is to be the world's default
| currency before you go ignoring the value of getting that one
| thing _right._
| sfblah wrote:
| Examples of blockchain use cases?
| constantcrying wrote:
| Can you name a concrete example?
|
| I do not count money, as crypt is technically inferior to
| non-blockchain based digital currencies.
| hocuspocus wrote:
| A permissioned stablecoin run by big tradfi players is by
| definition not a blockchain.
| highfrequency wrote:
| May be looking at this the wrong way, but I thought the point of
| stablecoins (as compared to normal USD) is that the banking
| system is slow, expensive and cumbersome to transfer USD due for
| regulatory reasons and perhaps legacy tech reasons.
|
| If so, what is the point of stablecoins if the banks themselves
| are running it? If regulations and technology are no longer an
| issue, can't they just make USD transfers fast and easy? Why
| bother with a wrapper around USD?
| logifail wrote:
| > the banking system is slow, expensive and cumbersome
|
| I think you missed "profitable" from that list.
| Ekaros wrote:
| What I have understood that banking as in the money handling
| process is not that profitable. Keeping track of people
| account and allowing them to do transfers is not that great.
| Payment processing is better. But real money comes from
| gambling and offering gambling services... Also known as
| investing...
| nilamo wrote:
| > But real money comes from gambling and offering gambling
| services... Also known as investing...
|
| There's a huge gulf between a night at the poker tables,
| and buying into a little of MSFT's dividend, and it's
| really disengenuous to pretend they're the same.
| Tryk wrote:
| Yes, in one scenario when you lose the money you move on.
| In the other, governments bail you out and you keep
| gambling.
| tonyhart7 wrote:
| "can't they just make USD transfers fast and easy?"
|
| its cause regulation???, easy and fast to moving money its good
| until you got hack from state sponsored actor that you can't
| even do anything (ehm ehm north korea ehm)
|
| in seriousness, people can get away with billions of dollar and
| "vanish" is wild world if you think about it.
| pornel wrote:
| UK _regulations_ forced banks to create APIs for money
| transfers, and UK banks now have instant free transfers:
| https://en.wikipedia.org/wiki/Faster_Payments
|
| USA is just bad at governing. Tries not to tell corporations
| what to do, so it ends up with toothless half-assed laws that
| do nothing except being a tool for regulatory capture.
| DennisP wrote:
| So your suggestion is that they build a new system that makes
| USD transfers faster. Isn't that what they're doing?
|
| If they want, then they can make banks the only entities who
| can hold their stablecoin, and the whole thing would be
| invisible to everyone else.
|
| If they allow other people to hold the stablecoin directly,
| then they could still have the invisible system with banks
| holding it, plus there'd be extra capabilities on top, like
| letting people use the coin in smart contracts.
| yapyap wrote:
| the point of crypto was "decentralization", banks getting
| involved is not what they were initially meant for at all
| bandoti wrote:
| And the point of Bitcoin was a means of transacting, yet
| people are just mining them and holding as an investment
| asset!
|
| Once AI takes over and these digital currencies are "smart"
| and tightly integrated, we're going to be living in a Black
| Mirror episode.
| tm-guimaraes wrote:
| Network.
|
| Sending USD from random bank from random country to another
| random bank from another random country is a network problem.
| While it's solved by SEPA in EUR to EUR countries by pan
| european clearing and settlement systems, out in the big world
| it's not as simple. Specially considering cross-border.
|
| You have to somehow get the payment message across banks and
| decide on how to settle. It fundamentally a hard problem.
|
| Stable cryptos put the message and settlement in the same
| system and it's a global one (not just EU/wtv). The problem is
| then, which stable crypto? The moment the Fed has a USD crypto,
| our ECB has an Eur crypto, than that problem is solved. In the
| meanwhile, joining a big stable usd crypto might still provide
| you better remittance routes (and settlement) than sending
| messages over swift.
|
| Tldr: stablecoins solve remittance routing "edge cases", if the
| stablecoin is adopted enough
| Ekaros wrote:
| What I have missed with stablecoins is that how they fix the
| final settlement. That is say you send money from USA to say
| Somalia or North Korea. Who in those countries will have
| dollars most likely to give out for the stablecoin?
| wildrice wrote:
| Paper dollars are a common store of value in emerging
| markets. Trading digital dollars for paper dollars, is
| becoming as common as paper foreign exchange
| kilimounjaro wrote:
| In practice, everyone just has binance app and pays each
| other stablecoins within that platform
| xyzzy9563 wrote:
| The final settlement inside Somalia or North Korea isn't
| necessary because they can buy things from other countries
| where those people can do the settlement. Just like if you
| have US dollar bills in Somalia, they have value even if
| there is no nearby ATM you can find to deposit them.
| ahazred8ta wrote:
| There are already hawala / xawala money transfer services
| in Somalia that will exchange cryptocurrencies for physical
| dollars or local currency, or load value onto a local phone
| app. Does that answer your question?
| https://en.wikipedia.org/wiki/Hawala
| Ekaros wrote:
| So why are stablecoins needed if there is already a
| system?
| Spooky23 wrote:
| The banking system can move billions in seconds. Velocity is
| only an issue for criminals and people trying to avoid taxes.
|
| The people who are the thinkers in this space like to quack
| like libertarians and look back fondly at the gold standard.
| For better or for worse, they are driving US policy now. It's
| one of the reasons why our government is setting the financial
| and economic system on fire and destabilizing the dollar.
|
| If you want to provide fan service to the idiots keeping you in
| office, and get really really rich in this process, what do you
| do? Pivot to crypto as there isn't enough gold to capitalize
| the world, and outsource the new version of the fed to private
| interests.
|
| This is a way to stay relevant from the banks point of view in
| what whatever this new world turns into. They add value because
| there's inherent trust in day JPMC, UBS or Barclays versus some
| random crypto bro company.
| ForHackernews wrote:
| I'm sure they're excited to offer bank accounts that don't pay
| interest.
| wslh wrote:
| > If so, what is the point of stablecoins if the banks
| themselves are running it? If regulations and technology are no
| longer an issue, can't they just make USD transfers fast and
| easy? Why bother with a wrapper around USD?
|
| I think at a macro level, the key point is that banks were
| initially unmotivated/uninterested in, and critical of crypto.
| The long-term effort behind stablecoins to become compliant and
| aligned with regulatory frameworks has now positioned them as
| useful infrastructure. Today, banks can simply adopt or acquire
| the benefits of a system they had no interest in building
| themselves. The current US administration clearly helps.
| dandanua wrote:
| Don't try to be reasonable, this is not how cults and pyramid
| schemes work in this world.
| crystal_revenge wrote:
| I've come to realize I was very wrong when I used to think
| crypto was a scam and therefore would never succeed.
|
| My error was in believing being a scam had any correlation
| with whether or not something would be successful or not.
| Yizahi wrote:
| The point is absolute control of ALL accounts of some token and
| every single token in said accounts from a central location.
| And no, currently digital money are not even close in the level
| of control.
| jrm4 wrote:
| I mean, to get negative but real.
|
| The point is for banks to remain powerful in a world where
| cryptocurrency is at thing; in other words, to subvert the
| point of cryptocurrency.
| thatguyagain wrote:
| Isn't this what Ripple/XRP is intended for? I always wondered why
| the banks wouldn't just create and own their own network instead
| of relying on a 3rd party like that.
| csomar wrote:
| That's what SWIFT is. It doesn't settle which is in the banks
| interest (since they settle the transfers).
| thatguyagain wrote:
| Yes, for the settlement, sure. But I was referring to this:
|
| "Banks see an opportunity for stablecoins to speed up more
| routine transactions, such as cross-border payments that can
| take days in the traditional payments system."
| mousetree wrote:
| There is no settlement in Swift itself as it's not network.
| Swift is messaging only. Bank settlements would happen later
| through networks like SEPA or Fedwire.
|
| Ripple provides both messaging and settlement with XRP
| tonyhart7 wrote:
| but if bank moving to certain network, its not is just make it
| a "new swift" system??
|
| Gas fees would skyrocket and expensive again
| Mengkudulangsat wrote:
| Sounds like a race to the bottom.
|
| First, there's Tether > We're the only option in town. Then,
| there's Circle > We're more legit than Tether, we're based in the
| US. Now, there's the banks > We're more legit than Circle, we're
| banks!
|
| Eventually, the Fed itself will start issuing stablecoins and
| out-legitimize everyone else.
| jmclnx wrote:
| This, I it has been 17 years since the last big economic crash.
| I guess the Banks need to make quick $ and cause another crash.
| smeej wrote:
| When Coinbase and Circle formed the CENTRE Consortium back in
| 2018, they were extremely clear, at least internally, that they
| were trying to build what would become FedCoin. They hoped
| that, because USDC is already designed such that it can be
| completely controlled by its issuers (they can freeze any
| wallet at any time), by the time the Fed realized that CBDCs
| were inevitable, they would just adopt the existing
| "legitimate" leader rather than trying to roll their own.
| wtmt wrote:
| > Eventually, the Fed itself will start issuing stablecoins and
| out-legitimize everyone else.
|
| That would be a CBDC (Central Bank Digital Currency), which the
| current administration doesn't seem to want. One advantage of
| such a CBDC would be that central banks of other countries
| could be persuaded to use them (for cross border payments and
| transfers), whereas a stable coin issued and managed by a group
| of banks would likely not have this advantage (not saying never
| though).
| hocuspocus wrote:
| I fail to see what a CBDC and/or Fed sanctioned stablecoins
| would achieve for entities outside the US that need to
| transact in USD. It would essentially work the same as today
| under a new name?
|
| The point of a CBDC is government control over an increased
| share of the money supply. Pretty irrelevant to USD balances
| held by other central banks.
|
| The point of a stablecoin for an entity with an American
| banking license is... nothing?
| Maken wrote:
| Sounds like a race to the top. The issuer with the highest
| credibility also has the crypto with the highest credibility.
| WinstonSmith84 wrote:
| > the Fed itself will start issuing stablecoins and out-
| legitimize everyone else
|
| That's doubtful everyone else will be out-legitimized ...
| because ultimately the Fed will issue coins they can fully
| control (freeze, delete, etc. whenever they wish so). That
| doesn't make holding such money very valuable. A lot of people
| understanding this concern will favor USDT or similar privacy
| oriented coins and thus these coins will keep flourishing
| (however USDC could disappear for this very reason).
| Ekaros wrote:
| The great trick with stablecoins is that you can take people's
| money, but you can then refuse to give it back. Much harder to do
| with real money.
| tonyhart7 wrote:
| most "real" money are just digital now adays
|
| I think people don't know how hard to moving actual real money
| in terms of millions to billions
| Etheryte wrote:
| Looking at Citi, it's not hard at all, they regularly
| fatfinger sums like that left and right [0][1].
|
| [0] https://edition.cnn.com/2025/02/28/investing/citigroup-
| bank-...
|
| [1] https://www.straitstimes.com/business/banking/citigroup-
| acci...
| wtmt wrote:
| It's not much harder to do with real money. India, a country of
| 1.3 billion people, did it in 2016 with "demonetisation" of
| specific high value currency denominations. [1] Some people
| died because they couldn't get their own money from the banks.
| One could say that these people didn't get their money.
| Millions lost jobs and their livelihood because they couldn't
| get their money.
|
| Other countries have done somewhat similar things over the last
| century.
|
| On the same topic, real currency can become or be made
| worthless due to hyperinflation (and even normal inflation).
|
| [1]:
| https://en.m.wikipedia.org/wiki/2016_Indian_banknote_demonet...
| glitchc wrote:
| Demonetization is not the same thing as stablecoins.
| Countries are allowed to withdraw certain bank note
| denominations and it's been done many times in the past.
|
| In most countries where demonetization occurs, the central
| bank continues to accept demonetized currency for the
| foreseeable future, exchanging it for valid denominations at
| par.
|
| The government of India came down hard on corruption and tax
| evasion, more politically motivated than anything. But then
| people voted for it and the majority supported the process.
| If they didn't, the government would have been discarded in
| the next election.
| cactacea wrote:
| I visited India during that whole mess and one of the first
| things I saw after I left the airport in Hyderabad was
| massive lines of people waiting at every single ATM (that
| still had cash anyway). Trying to change out USD was
| literally impossible unless you were willing to accept
| large notes - which were themselves pretty much useless.
| Good luck getting a street vendor to accept a [?]2000 bill.
| jbs789 wrote:
| Banks are slow in large part because of systems built to support
| the AML/KYC controls and fraud prevention. (Think about your wire
| transfer getting screened etc). New banks do this more
| efficiently but this is still the bottleneck.
|
| A bank doing stablecoins will still need to implement these
| controls.
|
| Stablecoins only really work because they are outside the system.
| lottin wrote:
| Exactly. A 'stablecoin' that is regulation-compliant is
| undistinguishable from a bank.
| drexlspivey wrote:
| Except you can send payments with an http request
| zaik wrote:
| A bank could easily provide such an API without any need
| for a new coin.
| solumos wrote:
| Does that API support sending $50 to my unbanked aunt in
| Mexico?
| baq wrote:
| Does Tether?
| arccy wrote:
| noone reputable would want to touch Tether and their
| anti-regulation stance.
| sethhochberg wrote:
| I'm curious though, what would she do with that crypto
| once she had it?
|
| Presumably she'd need to exchange it for cash since
| retail acceptance of crypto is pretty low, and the local
| exchange place that takes WhateverStablecoin and hands
| out cash is going to take some commission. And at that
| point it seems like we've just reinvented Western Union
| or Moneygram.
|
| In your view is the advantage of the hypothetical
| stablecoin way of doing this that it exists outside of
| the money-transfer provider ecosystem until its actually
| exchanged?
| conception wrote:
| Western Union exists, yes.
| wbl wrote:
| Or $10,000 to my flexibly financed uncle in Bogota?
| kurthr wrote:
| Well, if you're big enough to be TBTF, then you can lever up
| stablecoin risk because you know you'll be bailed out after
| they let the little guys tank.
| disgruntledphd2 wrote:
| Except that you can do FX and global transfers much more
| quickly and easily.
| glitchc wrote:
| Nah, most banks globally have a mechanism to send and
| receive USD. That's sufficient for all use-cases.
| solumos wrote:
| > mechanism
|
| The mechanism often involves correspondent banks, and is
| generally pretty expensive ($25-$65).
|
| For scale, we're talking about transfer fees measured in
| cents with stablecoins.
| glitchc wrote:
| All of the cost is tied to compliance. A Swift message
| costs pennies, it's the due diligence behind it that
| banks charge for. Stablecoins will not change the
| compliance requirements
| thecupisblue wrote:
| Yes, but the mechanism involves multiple banks in a chain
| transferring money and messages between each other like
| it's 1559. So if a single bank in the chain demands more
| KYC or has an issue, it can take ages for the transaction
| to sync.
| dboreham wrote:
| Presumably on horseback with a leather satchel and a
| bugle.
| kiitos wrote:
| Regulation-compliance is kind of a requirement for, well,
| everything, stablecoin or otherwise, so not really sure what
| the point is here...
| conception wrote:
| Stablecoins don't need to have proof of reserves or any
| other normal regulatory requirements banks have.
| hoppp wrote:
| Circle has proof of reserves, fully regulated and I can
| use USDC like a regular ERC20, so I think they want the
| same.
| piva00 wrote:
| Curious what exactly differs between EU and USA to make
| American transfers so inefficient time-wise. In the Eurozone
| SEPA instant transfers are settled in seconds (usually under 10
| seconds, with max 20 seconds allowed), and AML/KYC regulations
| are quite strong.
| hocuspocus wrote:
| EU directives have forced banks to modernize at a pace that
| wouldn't have been possible if we just let the free market
| decide. There are downsides to the heavy regulatory
| framework, for instance the unhealthy consolidation and size
| of systemic banks. But we enjoy pretty advanced banking
| services and arguably the most flourishing fintech ecosystem
| by worldwide standards, mostly thanks to EU technocrats.
| jorvi wrote:
| The EU is also looking into creating a digital euro
| ("eurocoin", so to speak). The basic idea being to break
| the power and thus risk of systemic banks.
|
| You'd have an account at the ECB that you can keep your
| digital euros in and exchange to and for liquid euros.
| You'd get the ECB interest rate.
|
| Then if banks want to convince you to hold your eurocoin on
| their wallet / exchange / stake it, they'd have to offer
| better features and better interest than the ECB.
|
| Sadly banks are in full swing trying to torpedo the
| proposal with lobbying, to the point where there's a lot of
| noise about the ECB only being allowed to be a facilitator
| and not allowed to be actual competition to the bank, and
| instead it's banks that should get the sole right to hold
| digital euro accounts.
|
| > But we enjoy pretty advanced banking services and
| arguably the most flourishing fintech ecosystem by
| worldwide standards
|
| Interestingly enough the US does have very modern financial
| institutions: credit unions. An American woman I met in
| Vietnam and traveled together with for a bit had a Charles
| Schwab account that had more features, more free overseas
| withdrawals and a nicer mobile app than my Dutch bank. It
| was almost on par with Revolut / N26 / Bunq.
| solumos wrote:
| > Interestingly enough the US does have very modern
| financial institutions: credit unions. An American woman
| I met in Vietnam and traveled together with for a bit had
| a Charles Schwab account that had more features, more
| free overseas withdrawals and a nicer mobile app than my
| Dutch bank.
|
| Charles Schwab is the 12th largest bank in the US by
| assets.
|
| I do agree that credit unions can be great, however, the
| experience between them is wildly inconsistent. Some have
| apps that barely work, and some have decent apps that are
| a bit dated and clunky. The big banks generally have the
| best UX/support/etc.
| nayuki wrote:
| > The EU is also looking into creating a digital euro
|
| It's weird to call it a "digital euro" because the euro
| is already digitized by traditional banks! At an existing
| traditional bank, your balance is already a discrete
| number. Money can be sent and received electronically on
| communications networks without using physical media like
| coins and bills and cheques.
| roenxi wrote:
| > EU directives have forced banks to modernize at a pace
| that wouldn't have been possible if we just let the free
| market decide
|
| 1) Is that automatically good? Damn those capitalists and
| their slow and steady approach to major changes, I suppose.
| Wouldn't want to proceed too thoughtfully.
|
| 2) The free market in banking looks pretty much exactly
| like the crypto ecosystem. As people often put it,
| speedrunning banking history. The only thing slowing the
| financial institutions down is the regulation (which is
| pretty much the pro-regulation argument of "if we don't
| regulate it they'll do a bunch of stupid things too
| quickly").
|
| There isn't something of a free market in banking but the
| limitations are extreme enough that it is more of a heavily
| mixed to centralised one. Interest rates are managed by a
| central committee and banks provide any colour of service
| you like as long as it is black. Typically heavy KYC
| regulations to link the system to law enforcement and state
| intelligence systems. There is enough freedom to keep the
| fees fair and a bit of flexibility in what the money gets
| invested in which is pretty good. But for transaction speed
| I'd actually be a little surprised if the banks were
| allowed to control their own settlement timelines; I assume
| going to quickly would start running in to KYC-style
| compliance problems.
| mathgeek wrote:
| > 1) Is that automatically good? Damn those capitalists
| and their slow and steady approach to major changes, I
| suppose. Wouldn't want to proceed too thoughtfully.
|
| Considering how long it's taken even the most progressive
| regulations to be enacted, it's arguable that we've done
| anything but proceed without thoughtfulness towards how
| these changes affect the other 99% of the population.
|
| We sure do spend a lot of time letting the wealthiest
| folks skim those points off the top without spending any
| more than they are required to by regulations, though.
| edgarvaldes wrote:
| Same in Mexico. I just did a bank transfer that took longer
| than usual. It took around 10 minutes instead of 10 seconds.
| It was unusual for me.
| toast0 wrote:
| The US has almost 4,500 banks and about the same number of
| credit unions. They're subject to federal and state
| regulation. That's a lot of complexity to manage.
|
| However, there's FedNow immediate transfers, Zelle
| (consortium of banks) immediate transfers, same day ach
| (several batches daily), same day fed wire transfers within
| banking hours, and that's just the faster options.
|
| Decentralized systemd are slow to act and slow to change,
| which is why all of the faster banking initiatives tend to
| involve a centralized element.
| kevin_thibedeau wrote:
| Zelle is a frontend to ACH with some creative accounting
| until the actual transfer clears.
| Animats wrote:
| Right. FedNow really is "now", which makes the fraud
| problem worse. FedNow is currently handling about a half-
| billion dollars a day, which is not much for that
| industry.
| dboreham wrote:
| The US has much more corruption so banks have been able to
| bribe politicians into not requiring they provide low cost
| services that would mean their executives have smaller boats.
| arandomusername wrote:
| just an additional note, the instant transfer is only up to
| 15k euro
| wbl wrote:
| You really don't want one typo costing your entire bank
| account as a consumer. Settlement delays permit easy
| rollback.
| xiphias2 wrote:
| Partly it's true, but also all banks in the world are
| fractional reserve / printing money from thin air from the
| loans they got from bigger banks.
|
| If the big US banks are successful, they can have their own one
| huge fractional reserve that can be used by people around the
| world.
| hocuspocus wrote:
| Not only this isn't how banks work, but also completely
| irrelevant to moving money.
| ta12653421 wrote:
| Then whats your brief description of how banks create new
| money?
|
| While the wording was imprecise, actually this is what
| banks are doing: Creating loans, based on the deposits of
| customers.
| hocuspocus wrote:
| You wrote "from the loans they got from bigger banks"
| which makes little sense.
|
| Private banks create money by extending credit, that's
| it. They worry later about reserve requirements, which in
| the case of USD or EUR are extremely low.
|
| And I still don't understand how this relevant in any way
| to the topic.
| ta12653421 wrote:
| I wasnt the OP :)
|
| They are expanding credit, but they need customer funds
| on the central banking level to actually move away the
| money the created on their local core banking; thats the
| reason why banks needs customer funds: Without them,
| their central bank account would be empty and they
| couldnt transfer any money that they created. the
| question regarding minimum reserve is another angle and
| not relevant to the question of how money is technically
| created and then transfered.
|
| EDIT: for sure, they can also acquire central bank money
| as a credit to make the payments transfer happen, but
| usually its more easier and convenient to use customer
| funds instead of borrowing from the central bank or on
| the interbank level
| hocuspocus wrote:
| My bad. Sure it's easier and more convenient, and also
| it's cheaper. But not entirely necessary.
| LatteLazy wrote:
| I don't think that's true in this case. I would assume the bank
| issuing the coin has to know the identity of the people they
| sell it to. But once those people sell it on, it's not their
| problem any more. Sure they could get an order to seize those
| coins (/wallet) and would have to obey. But I don't think
| they'd be required to kyc everyone on the network. Just their
| immediate counterparties...
| disgruntledphd2 wrote:
| The idea is (as I understand it) that to get fiat (which is
| presumably the end-goal) you need KYC, so if each node which
| converts stablecoin-fiat then you have acceptable KYC. (I am
| not a regulator though, so who knows?)
| nickysielicki wrote:
| If treasuries break all of this is going to unwind in a horrible
| way. Stable _as opposed to what?_
| IAmGraydon wrote:
| Can you explain what you mean? Treasuries will continue to rise
| until yields are in the double digits. That, to me, is a
| foregone conclusion. How does this affect crypto, though?
| ptero wrote:
| Why do you expect the treasuries to rise into the double
| digits? And over what timeframe?
| IAmGraydon wrote:
| Over at least the next 4 years due to increasing inflation
| and erosion of faith in the US Government to honor its
| debts. Basically, Trump.
| sebstefan wrote:
| >Banks see an opportunity for stablecoins to speed up more
| routine transactions, such as cross-border payments that can take
| days in the traditional payments system
|
| Nothing that crypto is needed for
| rvz wrote:
| Yeah, why didn't they just use FedNow? /s
| monero-xmr wrote:
| Hacker news / YC mostly missed the boat on crypto. The comments
| here are ignorant and misinformed. Lots of M&A happening now,
| none of which is lining YC pockets. Pretty amazing how the
| "smartest" people could be 100% wrong on crypto
| supplied_demand wrote:
| What is the goal of this comment? Who was wrong? What were they
| wrong about? What percentage of crypto acquisitions involve
| Web3?
|
| Coinbase was in the Summer 2012 batch. 13 years ago seems like
| a good sign that they weren't as ignorant as you claim. There
| are currently 73 companies listed on YC as being crypto/Web3.
|
| https://www.ycombinator.com/companies/industry/crypto-web3
| rvz wrote:
| Except they didn't as YC funded Coinbase.
|
| But you are still correct that the majority of HN missed out on
| crypto and thus are allergic to it and _now_ they are fans of
| anything "AI" despite not even knowing that "AGI" is a scam
| with the real intention of causing a 10% increase in global
| unemployment.
|
| In fact, AI is more likely to be the cause of another financial
| crash than crypto, once we see mass layoffs accelerating.
| SureMethod wrote:
| From your perspective, what are the most exciting or promising
| developments in crypto right now that others might be missing?
| I'm very interested to learn more.
| kilimounjaro wrote:
| Bitcoin gradually replacing the USD as the global reserve
| currency is quite an exciting development
| wslh wrote:
| > Hacker news / YC mostly missed the boat on crypto.
|
| I think the point is who won the bet with the current US
| administration. Also remember that Coinbase was part of YC.
| _heimdall wrote:
| I've yet to understand the argument often made that we need a
| stablecoin to replace fiat for faster or safer transactions.
|
| US banks already create money out of thin air and a vast majority
| of that money only exists in a database. If they want it faster
| they could just do that.
| XorNot wrote:
| Because cryptobros desperately need a legitimate reason crypto
| is the future, and thus valuable, and definitely not a round of
| tulipmania.
| _heimdall wrote:
| The argument isn't only made by cryptobros though.
|
| Banks seem to be pointing at the same need and I just don't
| see why. At best it gets around regulation if a stablecoin
| isn't treated the same as fiat. With either, though, a bank
| can already create and give out whatever they want and track
| it in a database (all be it a more standard db and not a
| blockchain or public ledger).
| XorNot wrote:
| Banks are run by finance people with a profit incentive.
| They're susceptible to trends - see subprime lending and
| CDOs in 2008 where even the big boys who _knew_ it was a
| bad idea eventually started doing it.
| _heimdall wrote:
| That still doesn't do it for me though.
|
| Banks in the US are somewhere between a legally protected
| monopoly and a racket. They would only make more money if
| they can charge higher fees or convince the economy as a
| whole to make more or larger transactions.
|
| If banks could do either of those with a stablecoin they
| could do it with USD, which again is effectively a
| stablecoin that lives in the banks' private databases.
| Geee wrote:
| This is great news. Stablecoins issued by banks are much better
| digital cash than CBDCs (central bank digital currency). EU is
| currently trying very hard to implement their own CBDC, and
| stablecoins will directly compete with it. A CBDC is basically a
| stablecoin issued by a central bank. The problem is that this
| digital cash would compete with currency in private bank
| accounts, and ultimately bank accounts wouldn't be needed any
| more. I think every bank must start issuing their own stablecoins
| if they wish to stay in business.
|
| Private banks issuing their own stablecoins will make the banking
| system little bit closer to the free banking system [0], when
| banks used to issue their own banknotes i.e. paper currency. This
| is better, because every stablecoin could have their own risk
| profile which is associated with the issuing bank, which would
| lower the overall systemic risk.
|
| On the other hand, a CBDC would be a move in the direction of
| single-tier banks [1], which centralizes all money issuance to a
| single bank.
|
| [0] https://en.wikipedia.org/wiki/Free_banking
|
| [1] https://en.wikipedia.org/wiki/Single-tier_banking_system
| steveBK123 wrote:
| Good luck with that given Lutnick is in this admin and has
| financial ties to Tether.
| thunkle wrote:
| Just pointing out https://www.worldlibertyfinancial.com/ 60%
| owned by the trump family and also Steve Witkoff (special envoy
| to the middle east) just got funded $2B by the UAE.
| https://en.m.wikipedia.org/wiki/World_Liberty_Financial No
| conflict of interest here??? Who runs the justice department? Who
| is not supposed to receive gifts from foreign nationals
|
| [Edit] corrected website URL.
| qoez wrote:
| I'm getting a phishing warning on that site but not on the one
| with properly spelled financial so I'm guessing the one you
| have is wrong
| outside1234 wrote:
| This will get worse and worse if we continue to not protest it
| amanaplanacanal wrote:
| We have had some let big protests in the US, and they haven't
| accomplished much. The two solutions that work are voting the
| bastards out, and armed revolution. You better hope voting
| works, because unfortunately armed revolution tends to end
| with even worse people taking power, which the "second
| amendment solution" folks somehow haven't realized.
| ta12653421 wrote:
| This is a SCAM site.
|
| The correct one is: https://www.worldlibertyfinancial.com/
| 6stringmerc wrote:
| Actually, they both are scam sites! /s?
| ujkhsjkdhf234 wrote:
| This is biblical end of days level stuff.
| scyclow wrote:
| I think what a lot of people are missing about stablecoins is
| that it's not just about clearing transactions faster than SWIFT.
| With stablecoins you get programable money without having to deal
| with the wild fluctuations of crypto.
|
| A simple (and contrived) example: Let's say I want to send you
| $100 on Tuesday, but only on even-numbered hours. This is a
| trivially easy smart contract to write. Sure, you could do this
| with crypto, but if you want to protect yourself against price
| fluctuations it makes sense to use a stablecoin.
| Yizahi wrote:
| Yeah, great innovation. Also allows for many amazing and useful
| features for us people, such as allowing these tokens to expire
| and disappear from your account, or programming specific tokens
| to be only transferable to specific accounts or for specific
| goods, or for example controlling all token accounts in every
| single country on earth from the central location. E.g. for
| example Trump (assuming a USA stabletoken) not only sends you
| to the Salvador death camp, but also blocks and confiscated all
| your tokens and blocks you from ever having a token account in
| the future, all with a single click from NY central bank. Or
| replace the same with any other country and central bank.
|
| Amazing utopia awaits for us, can't wait to take part in that
| hell economy :)
| GenshoTikamura wrote:
| And we can clearly see that some people are defending their
| utopia agressively by trying to fade your comment to gray
| scyclow wrote:
| Sure, but banks can lock your account without the blockchain,
| so you're not enabling any new dystopian behavior here. And
| if you're worried that they can restrict your transaction
| behavior, then don't hold that coin! Swap your money into a
| stablecoin that doesn't have spending allowlist logic encoded
| into the smart contract.
| hiddencost wrote:
| Or they could use fed now?
| tacitusarc wrote:
| This doesn't feel like a good thing to me. I can imagine a lot
| of pretty abusive smart contracts.
| NoahZuniga wrote:
| How are you going to abuse sending other people money?
| scyclow wrote:
| Like what? It's just a streamlined and versatile way to
| escrow money.
| only-one1701 wrote:
| You could also do this with any other kind of API a bank might
| expose? Why is crypto necessary here?
| solumos wrote:
| In this scenario, imagine that "you" are in a different
| country or perhaps you don't have a bank account. Or maybe
| you don't want to pay $10+ or X% to receive funds.
| arccy wrote:
| crypto isn't necessary... it's just that no bank wants to
| take on the risk of exposing an api to the regular consumer.
| xyzzy9563 wrote:
| Crypto doesn't require 3rd party permission to send money or
| verifying anyone's authenticity, real name, or legal
| compliance. So it's much easier to build APIs around. If you
| created banking APIs you'd need very extensive controls and
| monitoring for anti-money laundering and so on.
| bo1024 wrote:
| One thing is stronger guarantees for the receiver, who can
| verify that the smart contract will automatically transfer
| the funds. Another is interoperability. The receiver can
| write a contract to e.g. always donate half of that income to
| a charity as soon as it is received every two hours. Another
| is transparency and verifiability, anyone can check that the
| receiver is giving half this income to charity.
|
| Not trying to get pulled into any arguments about whether
| cryptocurrency is good or bad, just some potential answers to
| your question.
| jrm4 wrote:
| E.g. Automatic bill pay to a VPN. Now you have very good
| anonymity.
| acdha wrote:
| If you're making regular payments from a known wallet on a
| public ledger, where is the anonymity coming from?
| jrm4 wrote:
| A known pseudonym doesn't destroy anonymity?
| acdha wrote:
| It puts you one mistake or bit of misplaced trust away
| from permanent de-anonymization. In our example, you have
| to avoid ever using that wallet for anything else,
| scrupulously fund it using mixers, and hope that your VPN
| provider never does something which makes it possible to
| link your activity to that wallet.
|
| This is not realistic for the average person.
| scyclow wrote:
| Sure, you could technically wire something together that does
| this, but maybe the other party wants a strong reassurance
| that the payment will actually go through. They don't want to
| rely on your server making the right API call.
| gs17 wrote:
| > A simple (and contrived) example
|
| What about a simple but not contrived example (or if no good
| simple examples exist, a complex one)? Smart contracts are neat
| but I'm not sure there's any real benefit, especially for banks
| which likely don't need to do things without trusting each
| other.
| jrm4 wrote:
| Not sure why op didn't go with "$100 on the 1st of every
| month."
|
| That's just "automatic bill pay" without a bank, etc.
| scyclow wrote:
| I wanted to pick an example that is _slightly_ more
| complicated than what existing banking software provides
| out of the box. But my point was that you can just write
| your own logic without relying on the bank or another third
| party.
| scyclow wrote:
| I want to buy an event ticket from you, but we're strangers.
| So I write a contract that releases the money to you once you
| send the ticket, or vice versa.
| cube00 wrote:
| The ticket would have to be on the chain and you could then
| see just how much TicketMaster was making and we can't have
| that.
| scyclow wrote:
| Well, the good news is that you could also program event
| ticketing logic with a blockchain and build a
| TicketMaster competitor. But now we're venturing outside
| simple examples :)
| GenshoTikamura wrote:
| Sending $100 on Tuesday only on even-numbered hours is not a
| very likely use case for it.
|
| Paying wages that are only valid for a month, are split into
| parts which can only buy specific foods and goods inside a
| geofenced zone and can't be tranfered to any other person are
| much more likely.
| scyclow wrote:
| I said it was a contrived example! But people have really
| specific payment logic that doesn't seem to make much sense
| from the outside.
|
| What you're describing can only be achieved by encoding
| specific logic into the coin's original contract, so you'd
| know what you're getting yourself into ahead of time. And
| this is tantamount to agreeing to be paid in a specific gift
| card with a really small payment network. No need to get
| crypto or stablecoins involved.
| bearjaws wrote:
| More centralization is good for bitcoin.
| GenshoTikamura wrote:
| As well as less independence from The Banksters. In other
| words, it is the full reversal of the initial selling points
| that is good for bitcoin.
|
| So much for Satoshi's cryptoanarchy.
| zkmon wrote:
| I have seen banks doing this for about 10 years now. Some are at
| an advanced stage. They tried multiple things - third-party
| consortium chains, own coins, tokens etc. Now they are starting
| to realize that the banks need not jump on the bandwagon of
| public crypto or pegging to some chain. Collectively they can
| build their own self-sustaining chains.
| constantcrying wrote:
| What is the point?
|
| - Banks _should_ have controls over money that are impossible
| with crypto. It is absolutely vital for any state to control
| their own currency and the banks need methods to accomplish that.
|
| - Why would banks need a decentralized ledger at all? It makes
| literally no sense to have banks maintain such a ledger. Banks do
| not need to solve the double spending problem and you can build a
| digital currency without a block chain. Not as a theoretical, but
| right now basically all my banking happens digitally, what is the
| actual technical point of introducing a block chain to that?
| hocuspocus wrote:
| Regarding you second point, the funny thing about this space is
| that most stablecoins don't even try or pretend to be
| decentralized.
|
| This news reads like big banks and other major traditional
| finance players are building a database because FedNow doesn't
| cut it somehow?
| constantcrying wrote:
| The decentralization is my steel man of the idea. If you
| don't have to worry about the double spending problem,
| choosing a block chain instead of a normal database is just
| absurd.
| xyst wrote:
| Knowing banks, this will take much longer than 4-5 years to
| architect. Then an additional 5 years to rollout.
|
| This plan assumes the current mercurial administration stays
| their course on stablecoin to replace USD as reserve currency and
| future administrations also going along with it.
|
| It's a massive gamble that depends on many variables.
|
| For now, it's a PR move.
| ujkhsjkdhf234 wrote:
| >This plan assumes the current mercurial administration stays
| their course on stablecoin to replace USD as reserve currency
| and future administrations also going along with it.
|
| You are operating on the assumption that there will be fair
| election in 4 years and that Dems will retake the White House.
| Both of those are unlikely. Trump has almost killed democrarcy
| in 3 months. I'm sure he'll get the job done in another 3.75
| years.
| rthomas6 wrote:
| I really wish someone would make a stablecoin not pegged to some
| currency but to a basket of goods. A CPI-coin, if you will. How
| would that work? Maybe similar to the programmatic way DAI works,
| by collateralizing other assets in a way that make DAI some
| desired price.
|
| How cool would it be to have a decentralized coin that has zero
| percent inflation.
| hansvm wrote:
| "zero-percent inflation" relative to some particular basket of
| goods. If efficiencies and demand change to make that basket
| relatively less expensive than other things you care about
| (like land), you'll expect positive inflation in real terms.
| Negative inflation is possible the other way (e.g., if other
| baskets of goods wind up being more amenable to automation and
| the demand curve isn't too inelastic).
| kilimounjaro wrote:
| On a long enough time scale, this is bitcoin, with an
| additional NGU (number go up) characteristic which will persist
| until it achieves saturating global adoption
| acdha wrote:
| Bitcoin is the purest form of fiat currency valued solely
| based on social consensus, which is why it's so volatile.
| Anchoring something based on real-world commodities would be
| bad for speculators but much more likely to see real-world
| adoption.
| Ekaros wrote:
| Problems with pegs are that someone has to take other side. And
| that side is often losing one. You peg something to current
| amount of goods, but you have to be able to stand behind that
| whatever happens to value of those goods... The value drops,
| you made profit, the value massively increase. Now everyone is
| wanting to redeem and you need to be good on promise or whole
| thing collapses...
| cariaso wrote:
| If the GENIUS Act becomes the law, we're in for a FUBAR situation
| when a stablecoin issuer ends up insolvent. Even more concerning,
| if a bank custodian for a stablecoin issuer's reserves ends up
| insolvent, the claims of the stablecoin investors will come ahead
| of the bank depositors. That's right. Crypto comes ahead of ma-
| and-pa.
|
| https://www.creditslips.org/creditslips/2025/05/the-genius-a...
| scyclow wrote:
| I think this is why regulation is so important. As the GENIUS
| Act is written, all funds backing the coin need to be held in
| cash or Treasuries. And if they go bankrupt, coin holders would
| have a higher claim on that money than creditors. If
| stablecoins aren't regulated then what's to stop issuers from
| creating stablecoin products without those protections?
| 6stringmerc wrote:
| Great timing! I'm sure they'll really enjoy being targeted to be
| the next hop in the cat-and-mouse game of illicit substances and
| money laundering enterprises /s. LEOs are getting a lot more up
| to speed with these systems from what I've seen in the past
| couple years. Highly regulated industries like banking should
| have a really, really, really strong "use case" to get in other
| than FOMO in my opinion.
| SubiculumCode wrote:
| Violating the separation of banking from speculative investment
| never hurt anyone /s
|
| Same God damn story, over and over, but with the inevitable
| bailout. Heads I win, tails you lose.
| jcfrei wrote:
| A lot of people here rightfully questioning what's the use case
| of stablecoins. US dollars on a bank account essentially just
| represent a claim backed by a bunch of government debt - ie. US
| treasuries. But what if these treasuries became undesirable?
| Either because inflation runs very high or the creditworthiness
| of the issuer is questionable? what if - as a result - we have to
| build a financial system not based on government issued debt -
| but private (ie. corporate) debt? suddenly stablecoins become a
| lot more interesting.
| idiotsecant wrote:
| Corporate control of and ownership of the means of exchange is
| basically inevitable it seems, and it will be an absolute
| dystopia.
| redczar wrote:
| It used to be the case that individual banks could issue
| currency. It was found that having government control this much
| better overall. It's not perfect.
| NoahZuniga wrote:
| There is no reason to move to corporate debt to back deposits.
| There is no US credit risk because the US can always print more
| dollars. Because the debt of other US companies is also
| denominated in US dollars, it is equally exposed to inflation
| as US government debt.
|
| US treasuries becoming undesirable doesn't really have an
| effect on stablecoins, because (at least for USDC and I believe
| USDT) they hold short term treasuries that expire in a few
| months. The operator of the stablecoin can just hold the
| treasuries until they expire. Also if the operator of USDC
| can't pay out all claims right now, they will be in a few
| months so an oportunist market maker can buy USDC for 98 cents
| on the dollar and cash out 100 cents a few months later.
| scyclow wrote:
| I'd say that the risk of the US defaulting on Treasuries is
| definitely higher than zero... but if that happens then we'd
| probably have bigger fish to fry than stablecoins.
| Animats wrote:
| Stablecoins are money-makers now that interest rates are nonzero.
| With zero interest rates, there was no place safe to put the
| money, and many early stablecoins were scams. Now, they're
| profitable to run honestly.
|
| Trump has his own stablecoin, USD1.[1]
|
| But how much does it cost to get in and out? That's the question.
| FedNow charges US$0.045 per transaction.
|
| [1] https://coinmarketcap.com/currencies/usd1/
| alfiedotwtf wrote:
| First they ignore you Then they laugh at you Then
| they fight you Then you win
| Nasrudith wrote:
| Stablecoins, like all promised large reserves of liquid currency
| are an attractive nuisance for fraud and theft. Even pensions
| suffered from the same thing and got robbed by the mob first. Any
| stablecoin offer you are safer just assuming it is yet another
| fraud.
| LatteLazy wrote:
| This reminds me of the way Scottish banks used to issue their own
| notes independently (they still issue them now but are required
| to have Bank of England notes of equivalent value in storage)
|
| They were not legally currency (or legal tender) but acted as
| such. It if a bank was viewed to be in trouble its notes would
| start trading at a discount.
|
| Effectively it was a free market for currency issuance. Which I
| guess this would be too?
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