undefined | Better HN

0 pointsac296y ago0 comments

Given this all-caps disclaimer, I wouldn't exactly be reassured that USDC would be worth anything in the event Coinbase went out of business:

"USDC IS NOT LEGAL TENDER. USDC IS A DIGITAL CURRENCY AND COINBASE HAS NO RIGHT TO USE ANY USDC YOU HOLD ON COINBASE. COINBASE IS NOT A DEPOSITORY INSTITUTION, AND YOUR USDC WALLET IS NOT A DEPOSIT ACCOUNT. YOUR USDC WALLET IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC) OR THE SECURITIES INVESTOR PROTECTION CORPORATION (SIPC)."

(https://help.coinbase.com/en/coinbase/getting-started/genera...)

0 comments

4 comments · 2 top-level

gruez6y ago· 2 in thread

>Given this all-caps disclaimer, I wouldn't exactly be reassured that USDC would be worth anything in the event Coinbase went out of business:

But every line in the disclaimer are probably applicable to bond/USD ETFs as well, but people aren't exactly fleeing from those.

ac29OP6y ago

Bond holders have a certain legal right to claims on assets of a company that becomes insolvent - I'm not sure what legal rights USDC holders would have.

But either way, I think most people would not tend to view something like USDC as a bond (in which the bond holder is a creditor to the bond-issuing organization, with the associated risk-adjusted return on capital), but more like cash.

GoblinSlayer6y ago

Should the assets of the company provide full backing of the bonds?

shawabawa36y ago

If you read the FAQ, Coinbase doesn't even issue USDC, Circle does, so Coinbase going out of business won't affect the balances in Circle's bank account or the redeem-ability of USDC. They also actually publish regular audits unlike Tether

https://help.coinbase.com/en/coinbase/getting-started/genera...

j / k navigate · click thread line to collapse