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Comment by stickyricky | Hacker News Reader

If $1 is equal to 1 UST then why bother holding UST at all? Just hold dollars and convert for on demand usage.

You could stake UST stablecoins for 20% APY. You could also get loans with UST collateral, and stablecoins are native to crypto. How do you move a dollar out of coinbase, into a wallet, bridge to another blockchain, and then stake it? That's only possible with stablecoins.

My understanding is the sales pitch is that it's quicker to move in and out of a stable coin then it is convert to cash. Plus you can avoid having to keep your funds locked in at an exchange. There's been enough exchanges disappearing with people's money that I guess keeping your cash on a blockchain with a stable coin looked more secure to some traders.

> the sales pitch is that it's quicker to move in and out of a stable coin then it is convert to cash

That's true for bank account deposits as well. The sales pitch for this specific stablecoin is (was?) apparently an almost 20% APR on deposits.

> There's been enough exchanges disappearing with people's money

What's the functional difference between that and a stablecoin issuer disappearing with people's money?

Bank transfers usually take some time, days in some cases. My understanding is that keeping things on chain generally makes things go smoother.

> What's the functional difference between that and a stablecoin issuer disappearing with people's money?

I'm not invested into any crypto, exactly because of scenarios like this. Too many wildcat banks. A lot of people are going to rediscover why our financial institutions have so much regulation.

Debit card transactions can and normally are instant. The fee maxes out at 1-2%.

The real reason is that it allows you to trade using “United States Dollars” on exchanges which have no banking connections and often no KYC compliance. When you want to take a break from trading you can just put it into a “stable” coin and (mostly) not have to worry about crypto volatility.

On demand usage can mean long term staking, you can't do that with USD, you need a crypto token. I'm not saying it's smart to do that, but that there is a need for stablecoins.

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