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Comment by matthewdgreen | Hacker News Reader

Stablecoins are the killer app that everyone has been waiting for. When implemented properly (with reliable and regulated backing) they allow people to build financial apps that easily transact real money, without paying a fortune to a payment provider. Combined with scalable blockchains, I suspect they’re going to be a huge force in the future payment/finance ecosystem. That future ecosystem may not look radically different from what we have today, it might even be most of the same players: but there will be different “rails” moving money at a lower cost, and new players that wouldn’t have been able to start up without this.

Disclosure: I don’t care much about stablecoins but I am working on regulatory compliance tech for decentralized currencies, and my instinct is that stablecoins are where all the business interest is.

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I don't think this answer's OP's questions. Why can't you easily transact real USD?

USD isn’t tokenized — it can’t be placed on a crypto wallet and transacted on a blockchain. So essentially you have to create a token that represents $1 in order to use real currency in crypto trading.

Transacting USD requires access to legacy payment systems, such as the Federal Reserve's ACH. This system is heavily permissioned and requires a bank partner, with layers of middle-persons in between you and the Fed. It also runs on 1970s mainframe technology and has substantial clearing delays. This is currently the closest thing to an inter-party settlement system. Other payment providers exist outside of this, but don't have a great alternative to ACH for transacting between platforms, so they are islands with a few point-to-point bridges (think Venmo). Stablecoins potentially provide a fast and relatively permissionless platform to move USD (or other currencies) from owner to owner, essentially instantly. I think there are huge benefits to this and so stablecoin settlment will slowly "eat" the alternative systems as a result.

This is not to say that the transition will be straightforward. There are still many issues around transaction reversibility (ACH is reversible for a short period of time, due to trust relationships between banks) and fraud and money-laundering: not to mention that stablecoin regulation is still a work in progress and funds aren't FDIC insured. But I expect that some of these issues will get solved, and the tech will gradually replace ACH etc.

> without paying a fortune to a payment provider.

I'm not sure how you're avoiding that, especially once the stable coins are regulated? You still have payment processors to pay, just with different names

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