TL;DR
Tether alone now owns extra US authorities debt than main nations like Germany, the UAE, and Australia — and so they’re not solely cashing in on 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 gasoline 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 to date 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 vitality).
Right here’s why that is necessary, and prone to develop:
The US authorities generates money by promoting IOU’s (usually to different nations) with set rates of interest — and to those different nations, it’s a stable deal, trigger the US is seen in the identical mild because the Lannisters (from Recreation of Thrones):
They all the time pay their money owed.
Downside is…
There’s solely a lot US debt that different nation states can/are keen to purchase — and the US is ceaselessly hungry for recent money.
Stablecoins are the proper instrument for extending demand for US debt — they enhance the attain of the US greenback by permitting customers anyplace/in every single place to purchase US {dollars}, as a substitute of their (typically much less dependable) native currencies.
And this ain’t some hairbrained concept!
It’s already occurring in real-time. Tether alone now owns extra US authorities debt than main nations like Germany, the United Arab Emirates, and Australia.
(Shortly driving blockchain adoption within the course of).
We like to see it.
