Holmstrom's paper is a great one, I found it (and still find it) a difficult one to process.
On one hand, global money markets clearly haven't recovered since 2008 and on the other hand significant changes to money markets around transparency haven't taken up either (covered bonds haven't really taken off and centralizing treasury bond trading hasn't happened either). Maybe markets have changed irrevocably and we're in a brave new world...
Either way, agree that stablecoin is a terrible name and that hybrid stablecoins are the future.
It seems you don't dislike stable coins, you just don't like their present incarnation as opaquely backed instruments that occasionally hide ponzi schemes.
I seems you would like a stable coin that was appropriately back, right?
I am not sure who would take the effort to set this up, but I can imagine a stable coin whose assets are collectively owned by on a fractional basis by the holder of the coin. Assets would be held and managed by traditional financial institutions. And these same institutions would also manage binding contracts of guarantors who promise to provide USD in the case of excess redemptions.
I can imagine such a system where the coin holders can transparently see a list of reliable contracts covering the value of every stable coin. Backing the entire thing would be default insurance covered by either nation states or the worlds largest institutions.
Such a coin seems could still turn a very modest return for its holder, and it could be nearly as secure at the currency it is tied to. Indeed it could tie to a basket at be even more stable than any single currency.
It seems you would be a fan of such a stable coin?
I wouldn’t. This would just be a commingled tokenised deposit, like $USDC.
It would definitely be better than the confused jungle we have now, but also not ambitious enough. Such a tokenised deposit would be an extension of the emoney concept we have lived in fintech for a long time, I.e. a digital representation of currency held in a depositary institution somewhere.
I believe this is what regulators are aiming at, but I don’t believe this is in any way innovative enough and it simply creates an overlay on top of antiquated banking stack. It’s fintech 2.0.
But to have sophisticated conversations about what is what, we should start differentiating business models and discuss pros and cons of each.
Yes, what I envisioned was a either digitized dollars, or digitized gold. Essentially making use and verification of these things easier. And for a kicker creating smart contract derivative products that avoid counter part risks.
These three things seem pretty valuable to me.
I wonder what additional benefits you envision? (even if you don't explain the complexity of achieving them.)
Holmstrom's paper is a great one, I found it (and still find it) a difficult one to process.
On one hand, global money markets clearly haven't recovered since 2008 and on the other hand significant changes to money markets around transparency haven't taken up either (covered bonds haven't really taken off and centralizing treasury bond trading hasn't happened either). Maybe markets have changed irrevocably and we're in a brave new world...
Either way, agree that stablecoin is a terrible name and that hybrid stablecoins are the future.
It seems you don't dislike stable coins, you just don't like their present incarnation as opaquely backed instruments that occasionally hide ponzi schemes.
I seems you would like a stable coin that was appropriately back, right?
I am not sure who would take the effort to set this up, but I can imagine a stable coin whose assets are collectively owned by on a fractional basis by the holder of the coin. Assets would be held and managed by traditional financial institutions. And these same institutions would also manage binding contracts of guarantors who promise to provide USD in the case of excess redemptions.
I can imagine such a system where the coin holders can transparently see a list of reliable contracts covering the value of every stable coin. Backing the entire thing would be default insurance covered by either nation states or the worlds largest institutions.
Such a coin seems could still turn a very modest return for its holder, and it could be nearly as secure at the currency it is tied to. Indeed it could tie to a basket at be even more stable than any single currency.
It seems you would be a fan of such a stable coin?
I wouldn’t. This would just be a commingled tokenised deposit, like $USDC.
It would definitely be better than the confused jungle we have now, but also not ambitious enough. Such a tokenised deposit would be an extension of the emoney concept we have lived in fintech for a long time, I.e. a digital representation of currency held in a depositary institution somewhere.
I believe this is what regulators are aiming at, but I don’t believe this is in any way innovative enough and it simply creates an overlay on top of antiquated banking stack. It’s fintech 2.0.
But to have sophisticated conversations about what is what, we should start differentiating business models and discuss pros and cons of each.
Yes, what I envisioned was a either digitized dollars, or digitized gold. Essentially making use and verification of these things easier. And for a kicker creating smart contract derivative products that avoid counter part risks.
These three things seem pretty valuable to me.
I wonder what additional benefits you envision? (even if you don't explain the complexity of achieving them.)