The article argues that stablecoins, often viewed as a lifeline for the developing world, are instead a form of centralization that compromises privacy and security. Stablecoins typically operate on centralized blockchains where issuers have control over tokens, allowing for freezing or seizing funds. Transaction histories are easily traceable through account-based models, posing risks to individual privacy. Author suggests that with these attributes, stablecoins already act as a form of CBDC, concentrating information about users in limited hands, thus raising concerns about their role in the financial ecosystem.
Stablecoins are heralded as some savior of the developing world, a positive escape hatch for them from decrepit financial systems and local currency risks.
All of the stablecoin volume of significance happens on highly centralized blockchains, issued through highly centralized smart contracts that almost entirely have the power to arbitrarily freeze or confiscate any outstanding stablecoin tokens.
These blockchains almost all function on an account model, meaning that default behavior associates every transaction a user makes with a single public address identifier.
The United States does not need a CBDC, it has US Dollar stablecoins. They already function in a way that concentrates all private information.
Collection
[
|
...
]