The federal reserve could stand to learn a thing or two, honestly.
The structure of risk is similar for both Tether and Circle, AFAICT. While USD risk is heavily distributed across many regulated banks and there are measures in place to mitigate bankruptcy, USDC/T is fairly centralized and the fall of a single bank can put the entire currency at risk, cause sudden and extreme inflation (as is the case now), and potentially stop being accepted by even more merchants.
USD risk exists, but seems lower than USDC/T risk, and the same is true for its volatility. All in all, I am not surprised that there are more merchants that accept USD than USDC/T, and the change in methodology that would make the latter competitive would likely require taking a page from the Federal Reserve, not vice-versa.
Nobody pricing interest rate risk would have priced what happened last year correctly - it would have been considered a one-in-a-million event, not a routine response to high inflation.
This trained everyone to speculate that the Fed was ignoring inflation on purpose and they should allocate accordingly.
So many people unbuckled their seatbelts as the driver sped through several red lights while saying he wasn't even planning to touch the brakes. When he did eventually slam the brakes a moment later, the passengers flew through the windshield. The driver deserves blame, but blame him for speeding, not for slowing down -- the latter is the only responsible thing he did.
Happy to bet on that ;)
this is one of the silliest comments I've ever seen on HN.
Even in those parts of Mexico and Caribbean countries where the economy is heavily dependent on US tourism - and the US dollar will be accepted at retail shops; the price difference between paying in dollars and paying in local currency is going to be against the US dollar, and for any significant transaction, you will be better off paying in the local currency.
More to the point, it is true that a considerable part of international trade is conducted in USD. It is also true that the USA tries very hard to keep it like that (more so through economic sanctions than the military might), but it's hyperbole to state that any country that does not accept USD will get attacked.
For example, India and China buy a non-trivial part of their oil in roubles and have not been attacked - so far.
How could you mistake a coffee shop for a country?
Seems like you want to misread me on purpose?
_Libya_
2008 https://www.cfr.org/blog/libya-shunning-dollar (Libya Shunning the Dollar?)
2011 Invaded
_Iraq_
2000 https://www.cnn.com/2000/WORLD/meast/10/30/iraq.un.euro.reut... (U.N. to let Iraq sell oil for euros, not dollars)
2003 invaded
The USD has value because you need to pay your taxes in USD, and if you don't pay your taxes, the government will take away your freedom. It has nothing to do with people in other countries transacting in that country's local currency.
If it was about taxes people would just hold something else and converted some temporarily to pay their taxes leaving government with currency nobody wants.
It's all about people's trust and willingness to store savings and make loans in a given current.
I assume per your definition of "country" Norway should be a country as well.
Norway is a major party in selling oil and gas, but doing it so in NOK. Norway is not even part of NATO. At least until now.
So when do you expect an attack by the USA military?
Its neighbors Sweden and Finland are EU members whose citizens have recently come to widespread agreement that NATO membership is desirable.
Odd… because the head of NATO is Norwegian.
Your entire comment is completely misinformed.
