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 making the most of it, however driving blockchain adoption within the course of.
Full Story
You recognize these boring companies you hear about now and again that completely print cash?
E.g. Hunt Brothers Pizza — the gasoline station pizza enterprise that makes $540M a 12 months.
Yeah, nicely — 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 12 months.
(How? By taking a small proportion of the cash invested into their coin, and re-investing it to eek out a revenue — large financial institution vitality).
Right here’s why that is essential, and more likely to develop:
The US authorities generates money by promoting IOU’s (sometimes to different international locations) with set rates of interest — and to those different international locations, it’s a strong deal, trigger the US is seen in the identical gentle because the Lannisters (from Recreation of Thrones):
They at all times 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 ceaselessly hungry for recent money.
Stablecoins are the right instrument for extending demand for US debt — they improve 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 principle!
It’s already occurring in real-time. Tether alone now owns extra US authorities debt than main international locations like Germany, the United Arab Emirates, and Australia.
(Shortly driving blockchain adoption within the course of).
We like to see it.
