Wait so USDC is linked to existing USD in a bank somewhere, so what's stopping coinbase from just nulling the locked usdc and minting 262MM new ones? Sorry if it's a dumb question Im not sure how stablecoins work.
If a stablecoin issuer like USDC can make arbitrary decisions to null any USDC token and they use that power, that is a good argument for the point that they are not following aml/kyc on every hop or transaction of USDC, even though they are allowing the transfer of dollars behind it. USDC can be charged with violating money transmission / bsa / aml/ kyc requirements.
Probably a rhetorical question, but they might decide that it's a price they can pay for trust in their system.
Not sure if I understood where the real value currently is though.
If USDC can revoke any p2p transaction of USDC, that means that they can revoke the transmission of movement of dollars/reserves that USDC token represents. Implicit in that, means they have ultimate control or authority of all p2p transactions or transmissions, and they are not doing kyc/aml on all p2p transactions, thus in violation of money transmitter laws.
Yep, short of the fed issuing USD tokens directly that's always going to be how USD stablecoins work.
>so what's stopping coinbase from just nulling the locked usdc and minting 262MM new ones
Nothing, other than that they have zero incentive to do it. I doubt whatever goodwill they get will come close to the $262 million that they don't have to pay back.
Or... you could just lie about the USD and issue a stablecoin anyway.
[1] https://etherscan.io/token/0xa0b86991c6218b36c1d19d4a2e9eb0c...