@ki_young_ju: Dark stablecoins could emerge as censorship-resistant alternative

@ki_young_ju
@ki_young_ju

Dark stablecoins are likely to emerge in the future. #Bitcoin was created by the cypherpunk community to be censorship-resistant and belongs to no one, making it impossible to control. Stablecoins, however, act as a bridge between the internet and the real world, so they need someone to manage them. Companies like Tether and Circle have done this so far by holding cash reserves in banks. Governments, except when tackling money laundering, haven’t really interfered with stablecoins, which made them useful for various groups, like Chinese miners, as a safe place to store assets. But that’s changing. Soon, any stablecoin issued by a country could face strict govt regulation, similar to traditional banks. Transfers might automatically trigger tax collection through smart contracts, and wallets could be frozen or require paperwork based on govt rules. People who used stablecoins for big international transfers might start looking for censorship-resistant dark stablecoins instead. There are two ways dark stablecoins could be created: 1. Algorithmic stablecoins that aren’t controlled by governments. 2. Stablecoins issued by countries that don’t censor financial transactions. One possible example could be a decentralized stablecoin that follows the price of regulated coins like USDC using data oracles like Chainlink. I haven’t seen a project like this yet, but if you know of one, let me know. USDT itself used to be considered a censorship-resistant stablecoin. If Tether chooses not to comply with U.S. govt regulations under a future Trump administration, it could become a dark stablecoin in an increasingly censored internet economy. I'm not sure if there are still long-term crypto investors out there, but I think dark stablecoin-related assets could have investment potential in the Internet capital markets. DYOR.

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by mishaderidder.eth13093 🥝 • 1y • xcancel.com
AI summary of the linked article

Ki Young Ju argues that dark stablecoins, meaning censorship-resistant alternatives, are likely to emerge as governments move to regulate stablecoins similar to traditional banks. He says stablecoins issued by Tether and Circle have so far been managed by holding cash reserves in banks, and that governments have largely left them alone except to combat money laundering. He suggests regulation could bring automatic tax collection through smart contracts and wallet freezes, pushing users making large international transfers toward alternatives. Two possible routes are named: algorithmic stablecoins not controlled by governments, or stablecoins issued by countries that do not censor transactions. He also suggests USDT could become a dark stablecoin if Tether does not comply with future U.S. government regulations under a Trump administration.

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I understand the notion of "dark stablecoins", but I really don't like the flavor it adds to it. Is it really "dark" when the reserves and collateral are 100% onchain provable - is't exactly that turning everything upside down. Where the 100% on-chain stablecoin should actually be a "while stablecoin" while those who keep reserves in the dark (literally) through treasuries, tradFi banks, censorability etc - aren't these the dark ones? It's kind of baffling to me that just because it becomes censorship resistant (mind you, not necessarily illegal), it becomes a "dark" thing.
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+1, transparency is the opposite of 'dark'
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