May be wrong but the way I see it is when a stable coin is minted the amount paid for the usdc or ucdt is moved to the treasury as a one to one backing. As more money moves out of tradfi into crypto rails ie stablecoins the more stablecoin dollars become more sounder than the tradfi equivalent dollar which is backed by only fractional reserves. Its a silent offramp out of a fractional reserve system in a sense as long as you hold the original usdc or usdt version.

Reply to this note

Please Login to reply.

Discussion

That does make sense, if you can trust the stablecoins truly are backed 1 to 1.

Usdc and usdt both release attestations of their reserves. Its not perfect but better than fractional reserves of tradfi