Stablecoins are an important part of the financial ecosystem that is being developed. They are the bridge between the old and the new. The tie to fiat currency is necessary as we still operate in a world dominated by that.
Unfortunately, this has gotten the attention of the politicians and bureaucrats. The leading parasites want to take control in an effort to keep their exclusionary practices in order.
Here is a headline we see from btcmanager.com:
This sums up their intention. Stablecoins are on their hit list because they see the threat they pose to their monetary power. Hence, in their view, it is under their domain to protect everyone.
Of course, they come up with fancy names for their bills. This one is no exception.
Doesn't that just sound wonderful? We all like to be protected and turning to the government seems like a smart move there. After all, their track record around the world, especially when it comes to financial matters, is worthy of complete confidence.
Anyone with an ounce of sense sees what is taking place here. The only thing being protected is the existing financial system and the power of the political establishment. Nothing else is on their radar.
This bill goes well beyond just cryptocurrencies. It is meant to really hinder the progress of the entire industry. The goal appears to put it squarely in the hands of the existing power structure.
Part of this bill paves the way for Central Bank Digital Currencies (CBDC) which will give the government and political establishment a great deal of power over people's financial activity.
According to the same article, this is what the ultimate goal is:
“The term ‘digital asset trade repository’ means any person that collects and maintains information or records with respect to transactions or positions in, or the terms and conditions of, contracts of sale of digital assets […] entered into by third parties (both on-chain public distributed ledger transactions as well as off-chain transactions) for the purpose of providing a centralized recordkeeping facility for any digital asset.”
It will be considered as act of fraud to not enter ledger transactions in their centralized repository. Notice how it applies to all 3rd parties. This means any application would be responsible for doing this.
Of course, this will drive up the cost of doing business, simply so they can maintain control. This is really going to hinder innovation especially from smaller entities who might not have the means to engage in the proper legal advice to ensure they are in full compliance.
This also can be presumed to only be the beginning. We know there will other acts to increase their power. Stablecoins will continue to be a target.
The opposite of these plans of centralization is decentralization. When something is truly decentralized, there is absolutely nothing the regulators can do. The point of failure is removed. Without that vulnerability, they simply have to watch what is taking place, impotent to stop it.
It seems that the true way of accomplishing this is with peer-to-peer transactions. Throughout the age of the Internet, this is one thing that has always befuddled the regulators. Their ability to target something when it is node-to-node communication is nil, at least on a wide scale. They depend upon some third party application that has everything running through it to enforce their rules.
As stated in other articles, the epitome of this is Napster. Here was a company that introduced the world to file sharing. It did so through an application that was able to establish all the links. Of course, here was the point of failure and who do you think the establishment went after?
Yet did the demise of Napster mean the end to file sharing? Absolutely not. The reason for this is because there never was a need for a Napster to engage in file sharing. There are ways to get files direct. Here we sit 20 years later and the movie/music industry is losing billions of dollars per year due to this type of activity.
This is just one of the examples of how the governments of the world are inept against the digitization process that is taking place. If they can't stop a bunch of teen-agers from sharing songs, how are they going to approach the data when it has a monetary component.
The reality is they are impotent against stopping the peer-to-peer sharing of data. It is a fact that holds true no matter what the data is, including cryptocurrency.
As these proposals by governments keep popping up, it is worthy for us to look at the Hive Backed Dollar (HBD) to see if an alternative forming.
Since the problem with many stablecoins is they present a point of failure, we need to find something that does not have this. HBD could be one of the answers.
The challenge that was confronted over the last few months was how to keep the peg. Anyone who watched this currency over the years knows that it was anything but stable. It would be subject to massive pumps, followed by the inevitable dumps.
For commercial purposes, this ended up being completely worthless.
However, a lot of attention was paid to getting the peg in order and, thus far, it seems to be doing pretty well.
Right now, with the recent market run up, the price of HBD has shot up a bit. Here is what it looks like now.
Over the past month, for the most part, the peg has ranged between $.95-$1.05. While this isn't ideal, it is a major step in the right direction. Hence we can say that HBD is now stablecoinish.
Why is this important?
Outside of the obvious impact it can have on the commercial aspects on Hive, it is something that is controlled by nobody. The Hive Backed Dollar is not operating on a second layer. It was not developed by a project team or company.
Instead, HBD is resident at the core layer of the Hive Blockchain. This means it operates in a fully decentralized manner. All transactions can take place on a peer-to-peer basis. One wallet can transfer HBD to another, without the need of any third party.
We are doing a bit of forecasting here but it could be that something like this becomes more important as the regulators keep cracking down. It is evident the attack on stablecoins is not going to end anytime soon. As stated earlier, we are only at the beginning stages of this trend.
Recently, the Maker Foundation took steps to dissolve itself and turn the control of MKR and DAI over to a DAO. This could be completely coincidental or perhaps they did some reading of the tea leaves.
Either way, the next phase is to create stablecoins that are outside the reach of the established system. The answer is decentralization and it is evident that HBD already achieves this end.
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