[Femtiono]

Hey stable coin here! Let me just take your money, deposit away securely and do that with minimum effort.

Said no company ever...

Instead they take your money, give you some coin and now have your real money and do shit with it.

And why? Because operating a company costs money and handling money costs money. And greed

[godzillabrennus]

Bingo!

I looked into the business of issuing a stable coin back in 2018 and found that the only way to make it work so I could cover the costs of running the business was to invest the fiat into other ventures that could offer yield. At that point though the stable coin isn’t stable.

[Drakim]

I've always been curious about this, if you have a stable coin that's in the billions like some are, can't they just put the fiat into a bank account and live on the interest rate?

[daydream]

How much yield (return) do you need? In 2018 interest rates were still very low. Now treasuries yield much more. Of course that fluctuates, but still.

[rightbyte]

You could maybe make a stable coin work by having a progressive claw back tax on it for anyone but the bank.

I.e. after 1h the tax is 10% and down to 0 coins left.

Then there is a limit on how much outstanding coins (debt) there can be.

[saurik]

I don't understand how this could be true: can't you just charge fees for the things which require your effort? Tether, for example, charges 0.1% for every withdrawal.

[pjc50]

What does the cost structure look like? It's not the tokens, is it the KYC?

[imtringued]

This is one of the things that is weird when people insist on free bank accounts at their banks.

Yes sure as a secondary bank account with little usage, sure, but as your primary account? How do you expect your bank to stay around if they don't make money from the basic product they offer? They will try to upsell you, charge hidden fees and reduce interest rates, make risky loans and investments and all sorts of things that aren't aligned with your interests.

[Femtiono]

True and you know what? They do the same thing but regulated.

And that system is old and grown and fine tuned

[PaywallBuster]

With rising interest rates it should be making plenty of money

> $16b BUSD issued, 3 month tbills ~4.6%, so $713 million run rate divvied up between Paxos and Binance, of which a decent portion probably subsidized user trading fees on the /BUSD pairs

https://twitter.com/BowTiedIguana/status/1625069835645497344

[dghlsakjg]

That’s exactly what they’re doing if you trust their balance sheet.

They have less than a billion in cash and the rest is t-bills and Treasury RRP.