Talk:Stablecoin/Archive 1

Archive 1

Description on how Seigniorage stablecoins actually perform should be added.

It seems that while the first four categories of stablecoins have their methods described, the seigniorage method has no such support. — Preceding unsigned comment added by Dr-Bracket (talk • contribs) 01:58, 4 November 2018 (UTC)

Centralized vs. Decentralized

It looks to me like the centralized/decentralized dichotomy is false, and non-standard terminology. Commodity-backed crypto-currencies do not need to be stored in a centralized vault. The trust network technologies of Ripple and Stellar make decentralized backing possible. For example, people trade in XAG (troy oz silver), but depend on their trusted friends rather than central authorities for redemption. In short, the current typology falsely assumes that redeemable crypto-currency requires a central vault. No, it could be more like Bittorrent, with a multitude of vaults, where each person is his own bank. Maybe backed and unbacked stable currencies would be better terminology.PhilLiberty (talk) 02:01, 9 May 2019 (UTC)

The categorization in the cited article gives: 1. Fiat backed - redeemable in a government fiat currency 2. Commodity backed - redeemable in a commodity, e.g. silver or gold 3. Crypto-currency backed - redeemable in a basket of cryto-currencies 4. Non-government fiat - an adjustable algorithm and/or “Municipal Reserve Board” controls the quantity.

Here’s the article: https://masterthecrypto.com/guide-to-stablecoin-types-of-stablecoins/ PhilLiberty (talk) 04:49, 9 May 2019 (UTC)

Extended-confirmed-protected edit request on 24 June 2019

Other kind of virtual coin is the Endocoin. Endocoin is an in-site virtual currency like Linden Dollar on the Second life and V-Buck ( Vindertech Bucks) on the Fortnite games. Those coins exist to satisfy the needs of the virtual environment for which they were created. 189.123.229.10 (talk) 01:34, 24 June 2019 (UTC)

 Not done: it's not clear what changes you want to be made. Please mention the specific changes in a "change X to Y" format and provide a reliable source if appropriate. MrClog (talk) 10:17, 24 June 2019 (UTC)

Extended-confirmed-protected edit request on 27 June 2019

Delete the last sentence from the introduction as the source (source 1, https://masterthecrypto.com/guide-to-stablecoin-types-of-stablecoins/) does not in any way refer to the term "unbacked". The definition of "unbacked stablecoins" may be wrong. JanSpörer (talk) 07:30, 27 June 2019 (UTC)

 Done The article did not match the source in its description of backed and not backed stablecoins. I've reworded the lede and reorganized the sections within the article to match the source descriptions Orville^talk 16:28, 30 June 2019 (UTC)

@JanSpörer: The requested edit has been made with further details above. Orville^talk 16:29, 30 June 2019 (UTC)

Extended-confirmed-protected edit request on 28 August 2019

Please link TrueUSD now that it has an article. It is mentioned under the "Fiat-backed" section Wjmelements (talk) 23:22, 28 August 2019 (UTC)

 DoneTerrorist96 (talk) 23:41, 28 August 2019 (UTC)

History of stablecoins?

Needs a bit of history. Libra (cryptocurrency) has brought the term "stablecoin" into public discussion - David Gerard (talk) 17:53, 26 October 2019 (UTC)

Extended-confirmed-protected edit request on 6 June 2020

Add USD Coin (USDC) to the examples of Fiat-backed stablecoins. Michael60634 (talk) 05:23, 6 June 2020 (UTC)

 Done, since it has an article - David Gerard (talk) 09:09, 6 June 2020 (UTC)

Extended-confirmed-protected edit request on 26 February 2021

change: but if there is a central vault, they may be robbed, of suffer loss of confidence.[2]

to: but if there is a central vault, they may be robbed, or suffer loss of confidence.[2] 89.205.136.196 (talk) 09:03, 26 February 2021 (UTC)

 Done Elliot321 (talk | contribs) 17:53, 26 February 2021 (UTC)

Extended-confirmed-protected edit request on 21 April 2021

{{subst:trim|1=

The article refers to Tether being unable to verify their dollar reserves. This has been proven to be untrue in the NYAG's lawsuit against Tether. I suggest that this section be removed.

 Not done: please provide reliable sources that support the change you want to be made. ScottishFinnishRadish (talk) 22:15, 21 April 2021 (UTC)

Extended-confirmed-protected edit request on 24 May 2021

under "Social advantages" - the referenced article lists these as potential "challenges/risk" NOT "benefits". please amend from "The Bank of International Settlements lists the possible *merits*" to "The Bank of International Settlements lists the possible *risks*", and the subheader from "Social advantages" to "Social disadvantages"

see pg.4 of https://www.bis.org/cpmi/publ/d187.pdf 170.148.244.20 (talk) 07:43, 24 May 2021 (UTC)

 Not done: Regardless of what the source says, that section lists clear advantages, not disadvantages. If the source is irrelevant, then please find a better souce. ― Qwerfjkl | 𝕋𝔸𝕃𝕂  (please use {{reply to|Qwerfjkl}} on reply) 20:00, 24 May 2021 (UTC)

UST Crash

under "Failed and abandoned stablecoin projects" section UST crash still missing https://www.nytimes.com/2022/05/18/technology/terra-luna-cryptocurrency-do-kwon.html Wiped out the 40 Billion marked cap in under 2 weeks.. The crash was initialized by multiple immense withdrawals which lead to panic-selling. pretty historic

See also https://en.wikipedia.org/wiki/Cryptocurrency_bubble#Collapse_of_Terra-Luna https://en.wikipedia.org/wiki/Terra_(blockchain)#_Collapse

Extended-confirmed-protected edit request on 9 August 2022

Change text in 'Criticism' section (X) to the revised text below this request (Y)

Existing Text

• The existing text is based on only one citation.
• The existing source is not recognised by Wikipedia's source rules (see Wikipedia:Reliable sources/Perennial sources#Sources).
• The existing text is based on a 2017/2018 understanding of the situation concerning Tether.

Revised Text

• The revised text provides greater balance in the Tether debate.
• The revised text is fully cited using the latest peer-reviewed research (as of 2022).
• The revised text uses perennial sources (all recognised according to Wikipedia's standards and guidelines).

. Amansaggu26 (talk) 17:34, 9 August 2022 (UTC)

Criticisms

Tether is currently the world's largest market capitalization stablecoin. It has been accused of failing to produce audits for reserves used to collateralize the quantity of minted USDT stablecoin. Tether has since issued assurance reports on USDT backing, although some speculation persists. Griffin and Shams' research attributed the creation of unbacked USDT to the rise in Bitcoin's price in 2017. Following that, research indicated little to no evidence that Tether USD minting events influenced Bitcoin values unless they were publicized to the public by Whale Alert.

References

 Done * Pppery * _{it has begun...} 21:33, 17 August 2022 (UTC)

Extended-confirmed-protected edit request on 19 August 2022

 Not done: that is a redirect to this page. SpinningCeres 02:55, 20 August 2022 (UTC)

See Also

• List of Stablecoins

--Treehorn 1991 (talk) 16:01, 19 August 2022 (UTC) Treehorn 1991 (talk) 16:01, 19 August 2022 (UTC)

Extended-confirmed-protected edit request on 21 October 2022

Under the subsection "Fiat backing," the phrase "which is held by a third-party–regulated financial entity" should be removed, as it implies a level of oversight that simply does not exist here. It's misleading for people without background knowledge of financial systems and regulation. 2600:6C5A:1CF0:85D0:ED46:4AAD:6370:FC63 (talk) 12:54, 21 October 2022 (UTC)

Please add link to MiCA legislation

Markets in Crypto-Assets legislation from EU is being implemented pn stablecoins. Please add a new Regulation heading and a paragraph:

The European Union passed the Markets in Crypto-Assets regulation (MiCA) in 2022. Regulations on stablecoins were expected to take effect in June 2024 and those affecting crypto asset service providers in the following December.

Ref: https://www.ft.com/content/78ebd5f9-dbb1-4dc6-84a8-1f8347bec535

Thank you. Yankinthebank (talk) 11:42, 5 July 2023 (UTC)

Please add link to MiCA legislation

Markets in Crypto-Assets legislation from EU is being implemented pn stablecoins. Please add a new Regulation heading and a paragraph:

The European Union passed the Markets in Crypto-Assets regulation (MiCA) in 2022. Regulations on stablecoins were expected to take effect in June 2024 and those affecting crypto asset service providers in the following December.

Ref: https://www.ft.com/content/78ebd5f9-dbb1-4dc6-84a8-1f8347bec535

Thank you. Yankinthebank (talk) 11:48, 5 July 2023 (UTC)

Extended-confirmed-protected edit request on 23 July 2023

This entry begins with " A stablecoin is a type of cryptocurrency where the value of the digital asset is supposed to be pegged to a reference asset, which is either fiat money, exchange-traded commodities (such as precious metals or industrial metals), or another cryptocurrency.[1]

In theory, 1:1 backing by a reference asset could make a stablecoin value track the value of the peg and not be subject to the radical changes in value common in the market for many digital assets.[2] In practice, however, stablecoin issuers have yet to be proven to maintain adequate reserves to support a stable value. " It would be preferable to begin the entry with a better framing of stablecoins:

"There is no universally agreed upon definition of a stablecoin. The cardinal feature of these crypto-assets is that they are designed with the primary purpose of maintaining a stable price relative to a specified asset, or a basket of assets (generally referred to as the peg). Beyond this common denominator, however, there is enormous diversity. RomanLegalScholar (talk) 16:00, 23 July 2023 (UTC)

References

I'm a bit confused by the language change proposed here (also your first source seems to be a malformed citation of several sources). You're suggesting the article should begin with "There is no universally agreed upon definition of a stablecoin" but then follow it up with a sentence that, in different language than the current opening sentence, essentially says the same thing as it—a stablecoin is cryptocurrency that is designed to have the same value as some reference asset.

I personally would shy away from opening the article with that sentence, since the opening is generally intended as a summary of the topic. It's pretty bad for a reader who knows nothing about the topic to get "there's no definition" as the first sentence, which tells them literally nothing. I think that holds even if there are several competing definitions (and that's especially true if they all more-or-less agree on the value-tracking bit that seems central here).

For the second bit, is the source stating that there's enormous diversity, or is the idea that from reading that source, you can draw the conclusion there's enormous diversity? The latter might be original research and it'd be preferable to cite literature which states the conclusion directly. Dylnuge ^{(Talk • Edits)} 05:29, 24 July 2023 (UTC)

I take your point. You are right. It is clearer to simply open with

"Stablecoins are crypto-assets is that they are designed with the primary purpose of maintaining a stable price relative to a specified asset, or a basket of assets (generally referred to as the peg).

With regard to the second sentence "Beyond this common denominator, however, there is enormous diversity." this is a direct quote from Bruce, Kara J. and Odinet, Christopher K. and Tosato, Andrea, The Private Law of Stablecoins (August 16, 2022). 54 Arizona State Law Journal 333 (2023), Available at SSRN: https://ssrn.com/abstract=4191646 or http://dx.doi.org/10.2139/ssrn.4191646.

The authors then go on to explain that there are many, different stablecoins in existence and that their diversity is best understood by looking at three elements "issuer", "peg" and "stabilization mechanism". This classification of stablecoins based on their components was originally developed by Amani Moin et al., A Classification Framework for Stablecoin Designs, Cornell U. & AVA Labs 1, 22–24 app. B (Sept. 18, 2019), https://arxiv.org/pdf/1910.10098.pdf

Amani et al actually provide the most extensive classification of stablecoins available to date.

If it were up to me, I would actually restructure this whole Stablecoins article on the basis of the Amani et al classification. RomanLegalScholar (talk) 16:07, 24 July 2023 (UTC)

Got it, thanks. Regarding "crypto-asset" here, it seems like that's language you prefer to "cryptocurrency" as currently used in the lede? I'm not an expert in this area and not entirely sure what the difference is, but currently crypto asset is a redirect to cryptocurrency and the latter seems to be the far more common term (ngrams: [3], page views: [4], Google trends: [5]). Is there a justification for using "crypto-asset" instead? Dylnuge ^{(Talk • Edits)} 20:58, 24 July 2023 (UTC)

Cryptocurrency works. There is a big academic debate surrounding the use of "cryto-asset" and "cryptocurrency". For the purpose of this entry "cryptocurrency" is fine.

My bigger suggestion is that stablecoins should be explained based on their components: at a minimum peg, issuer, stabilization mechanism. This approach has become dominant in academic writing. I think it really makes it much easier to understand stablecoins. The two papers I references above Bruce et al and Amani et al. are excellent in this respect. RomanLegalScholar (talk) 22:09, 26 July 2023 (UTC)

• We dont need a generally agreed upon definition here at wikipedia. We just follow what the WP:RS describe it as and summarize that in the WP:LEAD. Suggest if you want to create a section on defintions, you can do that in the article body and then we summarize that result in the LEAD. Thanks! Jtbobwaysf (talk) 10:08, 28 July 2023 (UTC)

  So the end result of this long discussion is that the text of the article remains unchanged. Moreover, the only reference provided is to a 2021 Bloomberg article...not exactly an authoritative source. Could we not, at a minimum, state that there are many different types of stablecoins and that they are very diverse in terms of "issuer", "peg" and "stabilization mechanisms" and providing references to:

  1) Amani Moin et al., A Classification Framework for Stablecoin Designs, Cornell U. & AVA Labs 1, 22–24 app. B (Sept. 18, 2019), https://arxiv.org/pdf/1910.10098.pdf

  2) Bruce, Kara J. and Odinet, Christopher K. and Tosato, Andrea, The Private Law of Stablecoins (August 16, 2022). 54 Arizona State Law Journal 333 (2023), Available at SSRN: https://ssrn.com/abstract=4191646 or http://dx.doi.org/10.2139/ssrn.4191646

  As it stands, the text is not very informative. It does help readers appreciate that stablecoins are an extremely diverse category of crypto assets. RomanLegalScholar (talk) 17:26, 23 February 2024 (UTC)