Warren Davidson 🇺🇸
@WarrenDavidson
RE: Stablecoin Legislation
Commodity Backed Stable Coins (CBSC) must exist and be protected by laws recognizing them as payment stable coins. They are backed 1:1 with physical custody of the commodity, so they are priced based on the real-time market price for the commodity.
d (PAXG) is an asset-backed token where one token represents one fine troy ounce of gold, stored in secure vaults and audited by NY DFS. Anyone who owns PAXG has ownership rights to that gold. Since PAXG represents physical gold, its value is tied directly to the real-time market value of that physical gold.
Traditional stablecoins are great but somewhat less compelling - essentially tokens valued at $1 and backed by $1 worth of US treasuries. An example is GUSD. Every single GUSD in circulation is fully backed by cash or cash equivalents held across bank accounts, money market funds, and US treasury bills. Gemini customers can always redeem 1 GUSD for $1 on Gemini at any time.
Tokenized payments on blockchain have advantages. Nevertheless, if these assets remain account-based, their utility is more limited than when held in self-custody. Stablecoin legislation must protect self-custody. Companies want to engage in real-time settlement, including cross-border payments. Self-custody is the only way to make that happen. Everything else simply swaps one intermediary for another. Protect self-custody.
PS:
I remain strongly opposed to CBDC - Central Bank Digital Currency.
2025-02-11T16:32:52.000Z