> you should not speak about the utility of blockchain.
But most of the engineering around blockchain was to improve throughput (ie off chain transactions)
Its not like you can really do fractional reserve banking on the blockchain, well not practically. this means that you can't treat it like "money" ie the ever increasing supply of non-central bank controlled cash (ie your eurodollar, yen etc.)
There is no utility in stablecoins. They are basically joint stock company, but without an income, or case law to help you when it goes pop. Of course they are popular because they have no regulation and can basically do what banks do, but without any of the oversight need for stability/fraud prevention. "we are going to act like an investment bank, and create money, oh no, not by securities, but by word of mouth, that word being pyramid."
The utility of stablecoins is to bypass regulations. I suspect it could potentially be even more shady than that; could be some hack which leverages the Eurodollar system to allow EU entities to print US dollars which can be used inside the US.
The concept of fiat currency is fundamentally flawed. A US dollar in my bank account probably has nothing to do with a US dollar in your bank account besides the name. In reality; your bank uses one ledger, my (different) bank uses a completely different ledger. There is no consensus. It's not even the same currency in reality; only the name is the same.
If I hold a US dollar in a European bank account, it's yet another thing on a different ledger, operating under a different government with different incentives.
There are supposed to be checks and regulations to ensure that Europeans cannot print US dollars and then transfer them into the US for spending (to prevent Eurodollars from physically flooding the US economy), but correspondent banking is extremely complicated and there is no real consensus; one weak link in the chain (one nefarious or neglectful bank out of thousands) could potentially compromise the entire system and currency.
Imagine if some corrupt EU politicians, working with some big finance traders, found a way to digitally 'print' US dollars out of nothing within the EU and then spend them into the US; to redeem real US labor in exchange for these Eurodollars they printed out of nothing. I suspect this is where stablecoins may play a role as they are not as well regulated; some shady firms with minimal licensing and supervision could neglect to segregate Eurodollars from USD behind the scenes; thinking "A dollar is a dollar."
There is a big difference between exchanging currency vs converting currency. If, you were to set up an account which could receive both Eurodollars and USD and teat them both as the same; this isn't an exchange; this is a CONVERSION; it's counterfeiting.
But most people would see this situation and just think "This is just an international account which receives US dollars from both US and Europe; no big deal, nothing nefarious going on." They don't realize that the US Dollars printed by the US are not the same as those printed by Europe. I believe stablecoins may be an additional mechanism to try to blur the boundaries between the two monetary systems to allow counterfeiting.
But most of the engineering around blockchain was to improve throughput (ie off chain transactions)
Its not like you can really do fractional reserve banking on the blockchain, well not practically. this means that you can't treat it like "money" ie the ever increasing supply of non-central bank controlled cash (ie your eurodollar, yen etc.)
There is no utility in stablecoins. They are basically joint stock company, but without an income, or case law to help you when it goes pop. Of course they are popular because they have no regulation and can basically do what banks do, but without any of the oversight need for stability/fraud prevention. "we are going to act like an investment bank, and create money, oh no, not by securities, but by word of mouth, that word being pyramid."