TL;DR
Tether alone now owns extra US authorities debt than main international locations like Germany, the UAE, and Australia — they usually’re not solely taking advantage of it, however driving blockchain adoption within the course of.
Full Story
You understand these boring companies you hear about once in a while that completely print cash?
E.g. Hunt Brothers Pizza — the fuel station pizza enterprise that makes $540M a yr.
Yeah, effectively — stablecoins are kinda like that.
The main stablecoin, Tether, simply reported its earnings and have reeled in $5.2 billion of revenue thus far this yr.
(How? By taking a small proportion of the cash invested into their coin, and re-investing it to eek out a revenue — huge financial institution power).
Right here’s why that is necessary, and prone to develop:
The US authorities generates money by promoting IOU’s (usually to different international locations) with set rates of interest — and to those different international locations, it’s a stable deal, trigger the US is seen in the identical gentle because the Lannisters (from Sport of Thrones):
They all the time pay their money owed.
Drawback is…
There’s solely a lot US debt that different nation states can/are keen to purchase — and the US is perpetually hungry for contemporary money.
Stablecoins are the proper instrument for extending demand for US debt — they improve the attain of the US greenback by permitting customers wherever/in all places to purchase US {dollars}, as an alternative of their (usually much less dependable) native currencies.
And this ain’t some hairbrained concept!
It’s already taking place in real-time. Tether alone now owns extra US authorities debt than main international locations like Germany, the United Arab Emirates, and Australia.
(Rapidly driving blockchain adoption within the course of).
We like to see it.
