The Pokemon theory of stablecoins, which I think is approximately correct: https://medium.com/social-capital/tether-part-two-pokedex-november-4-2018-snippets-8f62e01e7772 … ("Explain it like I'm not five?" Speculative mania combined with a credit bubble; going to allocate billions of dollars in cash losses when it winds up.)
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“Why doesn’t this happen all the time in business?” Well for one thing some of the dollars in an ecosystem of firms would have been happily transferred in by customers paying for goods and services, a thing which customers only very incidentally require from the Bitcoin economy.
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This might be averted if Tether gracefully unwinds into transparently-backed fiatcoins like
@TrustToken TUSD etc. -
Seems like stabilization efforts would probably require a bunch of the winners to take dollars out of their pockets, put them back on table, and use them (via stablecoins/etc) to satisfy capital outflow. That might avert a bank run? Low epistemic confidence in mechanism
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