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Safest US dollar stable coin?

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  • 02-06-2020 9:22am
    #1
    Bob24
    Registered Users Posts: 10,905 ✭✭✭✭


    Wondering here ... which USD stablecoin do people think is the safest one?

    What I mean by safe is that you trust it is indeed properly backed by USD, that the issuer is sound and is handling the USD deposits in a safe manner, and that it is there to stay for the foreseeable future.


    Until know my choice has been TUSD as TrustToken seems to to be very good with publishing audits and to have a pretty good team behind the project. But I can see the market cap is been dropping (cut in half in the past 12 months), and I am not sure about the long term prospect of a coin which is losing users while the rest of the space is growing. So I might now be leaning towards USDC which has doubled its user base in the same period and also seems safer than Tether.

    Edit: I noticed after submitting my post that while TUSD is lagging behind in market caps, its transaction volumes seem to be quite higher than USDC - so it seems like the former is used more for transactional purposes and the latter for storage purposes.


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  • Options
    #2
    JJJJNR
    Closed Accounts Posts: 4,791 ✭✭✭JJJJNR


    https://stronghold.co/stronghold-usd

    Dont know much about it but its backed by an approved SEC something or other.


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    #3
    Bob24
    Registered Users Posts: 10,905 ✭✭✭✭Bob24


    Cheers, never heard of it before.

    Had a look at it and it seems solid enough, but it looks like a private coin only useable within an IBM cross-border payments solution?

    So just to expend on what I had in mind, I was thinking of stable-coins which are publicly available.


  • Options
    #4
    makeorbrake
    Registered Users Posts: 4,664 ✭✭✭makeorbrake


    Paxos Standard (PAX) or USDC.


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    #5
    Bob24
    Registered Users Posts: 10,905 ✭✭✭✭Bob24


    makeorbrake wrote: »
    Paxos Standard (PAX) or USDC.

    Cheers. I'd definitely go for these instead of Tether, but any particular reason for picking those 2 and leaving out TrueUSD?


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    #6
    makeorbrake
    Registered Users Posts: 4,664 ✭✭✭makeorbrake


    Bob24 wrote: »
    Cheers. I'd definitely go for these instead of Tether, but any particular reason for picking those 2 and leaving out TrueUSD?

    Ironically, Tether has not done much wrong (and where it has erred, it's usually been as a direct consequence of having banking facilities withdrawn or funds frozen). Most likely it will work fine for the foreseeable but of course that's not the point. At the end of the day, one day it could go pear shaped.

    Paxos seems to be well regulated. I wasn't familiar with TUSD so much - but it seems to be similar in that respect. Greater volume on PAX comparitively - other than that, I'm not sure of any other differentiators.


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    #7
    Bob24
    Registered Users Posts: 10,905 ✭✭✭✭Bob24


    One thing Tether is doing very wrong compared to the others is transparency though. It is hard to inspire confidence when they aren't able to publish audits by external parties unequivocly confirming they have all the assets to back their coins with no associated liabilities (which others stable coin issues seem to be able to do).

    As you said part of their challenges came from the fact that Tether was used to cover banking/legal issues of Bitfinex and not necessarily with issues directly with Tether itself. That might be an argument for sticking with stablecoins issuers which don't have legal ties with other companies and in particular with exchanges, as the temptation is always there to leverage the massive cash deposits backing the stable coins to cover liabilities of any associated entities.


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    #8
    makeorbrake
    Registered Users Posts: 4,664 ✭✭✭makeorbrake


    Bob24 wrote: »
    One thing Tether is doing very wrong compared to the others is transparency though. It is hard to inspire confidence when they aren't able to publish audits by external parties unequivocly confirming they have all the assets to back their coins with no associated liabilities (which others stable coin issues seem to be able to do).
    100%. Lots of Chinese money finding its way into USDT regardless though...now up to the 3rd largest digital asset by market cap.


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    #9
    JJJJNR
    Closed Accounts Posts: 4,791 ✭✭✭JJJJNR


    anchorusd.com is on the stellar dex, might be worth a look.


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    #10
    makeorbrake
    Registered Users Posts: 4,664 ✭✭✭makeorbrake


    I forgot to mention that if you want to trade general integrity/backing risk for technical risk, DAI is another option.


  • Options
    #11
    KilOit
    Registered Users Posts: 2,983 ✭✭✭KilOit


    I'm staking USDC a few months now and very happy with the returns but i'm looking to add to it considerably.
    I haven't actually transferred money from my bank to Crypto since early 2017.
    I'm not interested in adding more cash to risky Crypto other than stablecoins.

    Money is sitting in my bank doing sweet fa with mortgage paid and no loans etc. Is it worth transferring a sizeable chunk to USDC and leaving it for few years, anyone done it?


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  • Options
    #12
    Bob24
    Registered Users Posts: 10,905 ✭✭✭✭Bob24


    KilOit wrote: »
    I'm staking USDC a few months now and very happy with the returns but i'm looking to add to it considerably.
    I haven't actually transferred money from my bank to Crypto since early 2017.
    I'm not interested in adding more cash to risky Crypto other than stablecoins.

    Money is sitting in my bank doing sweet fa with mortgage paid and no loans etc. Is it worth transferring a sizeable chunk to USDC and leaving it for few years, anyone done it?

    In my opinion, the yields you can currently get (above 10%) are worth the *small* risk of depositing on a reputable lending platform (although I wouldn't go all-in and I would always keep some cash as euros at a bank). If we are talking large amounts I'd stick to the large reputable ones such as Celsius or BlockFi, and avoid DeFi platforms.

    One small concern I'd have though isn't related to the safety of the platforms, but the bother you might get from the State or banks if you deposits large amounts. I.e. it might be hard to get clarification from Revenue on how they want to treat the interests from a tax perspective (probably subject to DIRT, but this is arguable as technical stable-coins aren't a bank deposit), and your bank might bother you whenever you want to sell your stable-coins and transfer large euros amounts back to your current account. Probably no a showstopper, but something to have in mind.

    You are right that leaving cash at the bank is basically consenting to paying a hidden wealth tax though, as the interest rate you are getting is lower than consumer price inflation and *significantly* lower than assets price inflation (for most assets classes). I am going a bit off-topic, but another option you might want to consider is to put your cash in funds or investment trusts which are aimed as preserving the purchasing power of your capital with as little risk/volatility as possible (you can for exemple look into Ruffer Investment Company or Personal Assets Trust which are both listed on the London Stock Exchange - Ruffer actually has a *small* bitcoin position In their portfolio as part of their inflation hedging strategy). Those will return a little less than the interests you can get on stable coins (but should still do significantly better than your savings account) and be a bit more volatile, but with a lower risk of catastrophic failure, a clear taxation framework, and a lower risk for your bank to question your transactions.


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