Could Stablecoins provide the solution to the lack of dollars outside of the US?

The following is a fact that is not really well known.

A dollar outside the US in a bank is not the same as a dollar inside the US in a bank.

All those dollars outside are called Eurodollars (even though they have nothing to do with the Euro)

What is the Eurodollar

According do Investopedia:

The term eurodollar refers to U.S. dollar-denominated deposits at foreign banks or at the overseas branches of American banks. Because they are held outside the United States, eurodollars are not subject to regulation by the Federal Reserve Board, including reserve requirements. Dollar-denominated deposits not subject to U.S. banking regulations were originally held almost exclusively in Europe, hence the name eurodollar. They are also widely held in branches located in the Bahamas and the Cayman Islands.

This means that in these current times it is not possible to just wire my dollars from Switzerland to someone in the US. They are not the same thing. So my Swiss bank would have to exchange my Eurodollars for US dollars to be able to wire them over. In. real-life its a lot more complex but that is the gist of it.

That is where the cryptodollars come to the scene.

All those stablecoins we are using to hop in and out of BTC when trading are useful but I imagine they are going to become a lot more popular.

• With the Coronavirus sparking a recession the Dollar is going to rise and get stronger.
• This is going to happen for a while to come.
• More and more companies and countries have to pay off their debts and they have to do it in Dollar.
• Since there are only so many dollars around they will become more expensive People that bought some USDT or USDC in Venezuela before the inflation set in are really happy campers now.

So what are the creative people going to do?

They will get into stablecoins:

Some are backed by US dollars and some on Eurodollars depending where the bank account of the stablecoin company is located. Now these are both cool and will continue to grow. I would not be surprised to see USDT hit a marketcap bigger than BTC in the coming years. For me, this next solution is why crypto is going to take off and why it is so revolutionary Something like DAI is not backed by any Dollars at all but is collateralized by Crypto (mostly Ether) and magiced into creation. This system is outside of FED regulation and is printing something akin to a dollar and pegged to its price.

It allows people and companies to "invest" into the dollar without actually having to own any dollars or jumping through all the administrative hoops to get a US bank account if you are allowed at all.

• Some countries are not as free as most in the western world.
• Some people do not even have a normal bank account
• Most people own a smartphone or have some access to the internet

Currently the total amount of stablecoins is close to 12.000.000.000 USD and this amount is growing rapidly. If you want to keep your assets safe from inflation but do not want to own Gold or Crypto then the dollar is the next best thing. On top of that, most people are not familiar with BTC and Co but are not as sceptical to the concept of a digital dollar.

Personally I am putting some of my assets into 3 categories

• Some into BTC (and other crypto like ETH and Hive)
• some into Gold
• some into Cash (USD stablecoin)
• I am staying away from the stock market as far as I can as I have the feeling that there is another leg down coming soon.

This is my strategy, what is yours?

Posted Using LeoFinance