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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“Who is going to take the loss?” Who doesn’t have cash in their hands? Ceteris paribus that is who takes the loss, because there are too many claims chasing not enough cash.
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Some of those claims are denominated in tethers and some it Bitcoin but all are ultimately backed by the circulating USD in the Bitcoin economy, which is crashing as some folks take chips off table and no new hodlers join to take sweet -70% losses.
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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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