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  • Yeah, well we mentioned stable coins a few times there so we probably should talk about like what these curious instruments are.

  • Again, that's one of the things that caught my eye when I took a double take at this market and I thought wow that's some serious innovation.

  • But I had, I had student the other night on my course and they said um I'm looking at the stable coin brian, I don't know what to do with it because if I invest in it it doesn't go up, it seems so boring and what's the point?

  • And I laughed and I thought how can I explain this?

  • And I thought, you know what I like boring, there's sometimes where you like boring.

  • Um I have two young boys are four and five years old and they have a babysitter when I come home at night I want to see boring, I don't want to see somebody dancing on a pole, you know with the whiskey out and some party, you know, I want to, I want boring, you know, I want something that's not volatile that I know it's gonna be there.

  • I moved into a neighborhood where nothing goes on right and that's a beautiful thing.

  • And so I tried to explain that a stable coin does that similar thing where everything else can be chaotic and up and down.

  • The only thing I promise you is boring stability.

  • It will most likely be this one thing and we're gonna try really hard and the track record shows we can pretty much do that, but that in itself is his incredible value and maybe you can talk about this because this is also the embodiment of a smart contract.

  • And it also, I think even surprising to you has become one of the biggest uses of, Of Blockchain of your platforms as well, you know, who would have thunk a few years ago.

  • So again, maybe you can talk about some of those points.

  • Yeah and all that makes a lot of sense.

  • So a stable coin is a crypto asset that's meant to be represented exactly $1 and there's a huge demand for these stable coins because relative to dollars in the bank account, stable coins are much more portable.

  • You can send them to anyone anywhere in the world at any hour.

  • Um they can cross capital markets, they can cross geography is much more easily than dollars held in a bank account.

  • Can you know, even just wiring money to someone is like A chore.

  • You know, it often involves like visits to a bank and like $15 fees and it takes hours of multiple phone calls.

  • Right, stable coins are like the most portable version of the dollar.

  • Um you just can't keep them in your crypto wallet and you can send them to anyone else's crypto wallet.

  • Very simply, it can also be sent to a defi application and this is the second advantage of stable coins is that the programmable.

  • So anyone out there who's building a defi application can very easily program stable coins, they can build interest rates into markets for stable coins like compound, They can come up with tools so you can trade stable coins for other crypto assets and vice versa.

  • They're more useful than dollars held in a bank account because you can trade them, you can program them to do all sorts of extremely complex and rich behavior with them.

  • So you know, imagine the international demand for dollars, it's huge, it's off the charts.

  • Imagine the international demand for better dollars that are more portable and they're programmable and you can interact in all sorts of ways with them.

  • That's a stable coin.

  • And so what's happening is there's lots of like dollars that were being held in bank accounts that are moving into crypto, people are trading or buying stable coins with dollars.

  • They do this through coin based, they do this through exchanges, converting dollars into stable coins because stable coins for a lot of use cases are just better then dollars held in a bank account.

  • And likewise, there's a lot of people that are borrowing stable.

  • It's extremely hard to borrow dollars in the bank accounts very easy to borrow stable coins from a system like compound.

  • And so this borrowing demand creates a yield opportunity for those people with stable points and it's one of the things that actually pulls dollars from bank accounts into a stable coins in the first place, as people say, wow, I can earn a 3% yellow stable coins like I can't learn anything in my bank, it's 10 basis points or zero or 80 plus fees you know and so it is it is it the new gateway drug for crypto?

  • It used to be Bitcoin now with stable coins as in a nice way I'm saying it gets people to try it for the first time because it's so clear the volatility is low.

  • It's a great analogy I would say at this moment stable coins and N.

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  • T.

  • S.

  • Are like the two gateway drugs that get people into crypto that aren't, they are just to speculate on the price of Bitcoin or either in the first place it's extremely useful and interesting like on ramps into the ecosystem and if you're someone that's like boring that you don't want to go out and buy a bunch of Bitcoin and ether even if you think it's a great investment, you know you might be attracted to, oh I can earn 3% and the price of the thing doesn't go up right that's attractive to people who like boring and so you know this is something that surprised I think myself and the whole ecosystem is when compound lobster wasn't a stable coin as a supported market and it wasn't until you know compound been running for a while that stable coins really came into fruition and it turned out that this was like the killer use case of a decent decentralized financial market like compound was to borrow a stable asset which is much better than borrowing a volatile one.

  • Reader debt is uncertain And earning a yield on a stable asset is much more exciting than earning a yield on volatile.

  • So stable coins have turned out to be this like this unbelievably important tool for global crypto markets.

  • Yeah.

  • It's incredible if you think about it even back in the day if you would go to places like Russia or South America, even the 80s and 90s, you know the babushkas, they had dollars under the mattress right?

  • They knew they had been through the ruble devaluation as they had been through the repudiation that you know all the wars and everything they knew property or american dollars is where you'd hold that currency and now you're giving them it's not the equivalent we can talk about it but you're giving them you know something like that digitally and again you make some points.

  • A lot of people don't realize, I mean trying to get dollars out of a bank or move them geographically has all sorts of implications from you know K.

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  • And L.

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  • And who's doing this and who's taxing this and whereas with a crypto transaction it's it's boom it's moved it's instant and you're seeing like that instant nature of it you know changing people's minds on how crypto works.

  • Like people used to say like oh crypto is so much like a worst user experience than like the banking system in Venmo and all these things right?

  • Because it's like you have to have a wallet and like it's complex and received phrases and like if it goes wrong you can lose your crypto.

  • But like at this point stable coins are just superior to you know wire transfers.

  • You know they're faster, they're cheaper, they're instant, you know it's just like a better way for money to move.

  • And so I think like it's winning over like the hearts and minds of people.

  • I'm starting to venture capital firms using stable coins to invest in startups instead of dollars because they can you know close transactions like the second that the docks are side um you know I think stable coins are like this unbelievably powerful opportunity and I think it's one of the most important trends for the U.

  • S.

  • Dollar and I think it's catching the eye of you know the Federal Reserve and regulators at this point.

  • But I think there's like so much promise and opportunity, stable coins that you know I think the next couple of years are going to be a major turning point just in how dollars get used and hopefully the world can start to embrace stable coins just making dollars more useful.

Yeah, well we mentioned stable coins a few times there so we probably should talk about like what these curious instruments are.

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A2 stable crypto bank coin compound bank account

Robert Leshner On The Importance & Benefits Of Stablecoins ?

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    林宜悉 posted on 2021/09/09
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