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No, stable coins don't have to be exchanged for cash you can send them directly to people or swapped. Much easier to move than digital fiat rails. They have no privacy or anonymity, but most people don't care about that 🤷‍♂️ They are pegged to $1 USD so are very popular in the global south in countries in Asia, Africa, South America, etc. because their local fiat currencies are much worse in comparison.

You can also use them to "lock-in" your bull market gains if you're a trader and expecting your shitcoins are going to crash soon.

Most stables are permissioned and centralized; USDT/USDC your transactions can be frozen. It is still pretty rare occurrence but becoming more frequent. DAI is the only major one that is permissionless if you use it on ETH.

Another big problem is USDT and USDC collateral cannot be audited by anyone and supply is centralized. Tether can arbitrarily print new stable coins on a whim. People using them just have to take their word that they are good for it. Obviously I have no trust in them at all, but I can understand why some people find them useful in the short term for certain things.

Lucky Kite 1y ago

Thanks for the explanation. Seems its essentiually the same as changing crypo for fiat on an exchange (but more like a lightning channel for it). Ie a bit more convenient, delayed cash out. As you say anything that requires a similar level of trust as centralized exchange is unappealing. Might as well just use paypal.

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Discussion

Saberhagen The Nameless 1y ago

I don't think these people really "cash out" their stables for fiat. They hold them and use them like just like cash to buy, sell, and trade. Even at businesses and shops around them.

Lucky Kite 1y ago

Which businesses and shops accept stable coins? I figured at some point you have to change them for fiat unless the only thing you want to buy is black market goods.

Luxferre 1y ago

You can search for some examples at cryptwerk.com, but the list is quite incomplete there.

Lucky Kite 1y ago

many of these use just bitpay ( eg scan) thats just the same as using a crypto > fiat exchange. Scan don't even see the crypto, only the fiat. Its all fiat an KYC.

Luxferre 1y ago

I don't see bitpay as often as coinpayments, cryptomus, bitcart, whitebit and others that just allow you to send crypto directly from your own wallet to the specified address.

Lucky Kite 1y ago

you have to signup and register to use coinpayments, its not permisionless, its custodial.

Lucky Kite 1y ago

cryptomus is the same. The whole point of crypto is to have permissionless direct payments, not to rely on 3rd party buinesses providing custodial services . So again, I ask where can buy something with crypto directly online as per the orginal vision of Satoshi, with no custodial third party ?

Saberhagen The Nameless 1y ago

I don't use stable coins to buy anything so not sure. But if you scroll down this link there is a list of goods and services you can buy directly with Monero. Still working on it.

https://pb.envs.net/?fddbb02f3599dc10#5o6C51E4iNNQC5APBegEsMRTcDsNcHUFZXEMz6RNbUhq

Luxferre 1y ago

https://bitcart.ai

Fully self-hosted and open-source, servers.guru uses it, as an example.

Saberhagen The Nameless 1y ago

Local shops and businesses. It's very common everywhere in those places.

Luxferre 1y ago

Still, your address isn't tied to your name (and it won't if you do everything right) and if your balance doesn't exceed six figures (which it shouldn't if you do everything right) then you're much less likely to be noticed by Tether than by your local bank/govt in case of paypal.

Lucky Kite 1y ago

But what can you actually BUY with stable coins (or any crypto) apart from a vpn subscription?

Luxferre 1y ago

Servers, domains (although that's more rare), virtual numbers (even esims), refills or vouchers for many existing services, and, in some countries, there even are proxy stores that allow you to buy anything physical from ebay/amazon without disclosing your payment data to them.