What will happen with USDC if USA crash?

[erni]

Does someone know if the USDC coin is depending so much on the US dollar that if the USA will look into a new financial crisis in the near future that the USDC will crash too?

How secure would you rate USDC coin to be, I only consider to secure in the sentence to keep my money save there not monitoring.

 

[JohnLocke]

You really want to read this:
https://www.coindesk.com/think-stablecoins-are-solid-remember-the-financial-crisis
It is relevant to what you are asking‌ and may even clarify your question 😉

 

[Bandito]

The value of USDC⁠ will follow USD it's pegged to the price of USD, if the people behindeUSDC or⁤ Tether goes down i'm pretty sure USDC and Tether will be worthless.

I mainly use⁣ DAI because i feel it's safer than trusting companies holding the dollar reserve of the⁢ stable coin.

https://decrypt.co/resources/makerdao-guide-learn-explained-decrypt-3-minutes
https://makerdao.com/en/
I hope you can use the information 🙂

 

[avalanche]

More interesting question is, if you would like to have a chance to get your‌ wallet blacklisted CENTRE appears to have blacklisted an address holding USDC for the first time‍

 

[John Spectre]

If usd or usa crash, what will be with your usdc - will be your‌ minor problem.
Usd and usa is a major part of world economy. So literally everything‍ will crash in that case.

Secure of the stablecoins is plus/minus comparing to the traditional⁠ bank. Its a bit less secure from one point, but allow you to use your⁤ money with bigger freedom.

 

[John Spectre]

Ability of USDC smart contract to lock some wallet in⁠ reality have 100500 times less chance to blacklist your address comparing to the traditional banking⁤ system, when *almost* every person in the world already have similar issues with compliance despite⁣ that 99.999% of the people don't do anything shady.

 

[boomy]

Okay time to remove all USDC!!! 😡

But what would the alternative Stablecoin be then?︀

 

[John Spectre]

All stablecoins in contract implementation have this feature(for blacklist address), not‍ only usdc😉

 

[JohnLocke]

Interesting topic.

If all stablecoins have this clausal implemented as you say, what coin would‌ be the second best to keep your coins in, with less fluctuation?

 

[JackAlabama]

https://www.reddit.com/r/MakerDAO/comments/ab72as

maybe go with dai the decentralized smart contract stable coin. However there‍ are risks if this runs really well.

 

[nomad999]

from what I understand, USDC is backed by USD⁣ 1 to 1 so holding USDC is exactly the same as holding USD in a⁢ bank account.

suddenly USDT doesn't look so bad ahah
nevermind ....
https://news.bitcoin.com/tether-freezes-millions-of-dollars-usdt-40-addresses/

 

[Silvio]

Wait, so Tether can⁠ block your coins and give them back to law enforcement? You mean there is a⁤ CENTRAL authority that controls your coins and can freeze\block you from doing transfers/receiving funds? That⁣ doesn't sound very decentralized to me...

 

[John Spectre]

I think that ability to block addresses actually is good one and do‍ not reason for select other coin to hold.

The reason for this implementation is not⁠ for do some shitty things like a blocking regular users because of compliance problem in⁤ case of not enough tons of papers to prove funds/operations.
Crypto(as well stablecoins) are very⁣ client oriented now, not like a traditional banks who just follow stupid rules of regulators⁢ and do not respect clients at all.

Real reason for this implementation in contracts it's︀ a ability to protect blockchain itself and users from massive hacks or frauds over some︁ blockchain\contract.
In case some hacker will be able to harm blockchain\contract - his address will︂ be blocked, funds probably recovered (if thing implemented), and other tricks will be used for︃ minimize clients\blockchain problem.
I believe that few hundreds of thousands USDC that are blacklisted -︄ it's a just block of funds that was tried to convert some public related hacked︅ tokens via USDC.

 

[John Spectre]

Tether company, as well other stablecoins are responsible to backing to some currency. This is⁤ impose requirements to the model of token which is for sure centralized, comparing to the⁣ decentralized tokens like a bitcoin.

In any way, this central authority could even close project,⁢ literally destoy price of such token, or change backed rule from 1 USD to 1︀ token for some other thing.
So, it's a users choice - will it select true︁ decentralized coin like a bitcoin and will try to live with everyday volatility or will︂ go with centralized token like a stablecoin and will pay for price stability that token︃ is actually controlled by some people.

 

[avalanche]

That sounds good only if this capability is︅ used to actually do good things. But what if its being used on you just︆ because you crossed someone with political connections in business? Would you be happy to go︇ poor overnight?

 

[JackAlabama]

That is why the world wants and needs︅ Bitcoin.
Who decides what to block?
Is someone a rebel, a freedom fighter or a︆ terrorist?
Often ones terrorist is the other persons freedom fighter.

 

[JackAlabama]

It will and does get abused as you put it correctly. Maybe in the future,⁤ a benevolent AI could handle that power but I doubt it.
So it is better⁣ that no one actually has this power.

 

[nomad999]

well there is a reason why bitcoin is so valuable ^^

a smart contract can⁤ totally be centralized and controlled by a single entity, its up to whoever write the⁣ smart contract. A smart contract is however unconditionally open source and can be read by⁢ everyone and so you can identify which is decentralized and which is not.
the decentralization︀ of ethereum is that no central authority or single entity above the creator/owner of the︁ smart contract can modify it.

I completely forgot tether was centralized this way but it︂ make sense though, any dollar backed stablecoin must have some power over the tokens otherwise︃ no bank would be allowed to custody their dollar reserve.

that's why makerDAO with the︄ DAI token is very interesting as it is more of a synthetic dollar backed by︅ ethereum and is fully decentralized.

 

[John Spectre]

The chance that exactly my addressed crossed roads to the controllers of USDC is similar⁤ to chances that bitcoin will be blocked tomorrow in all world or it's protocol will⁣ be founded with critical bug, that will destroy coin. This chance near 0% 🙂
If you⁢ a person who do scams - probably you should scare this feature, but not i︀ am.

Personally, i would more worry that company which support stablecoin could be bankrupt or︁ have legal issues. It's more real way, why user could lost their assets overnight.