I think you answered your question yourself already in the previous posts.
USDT does not have the reputation to be fully compliant, including some red flags. USDT is by the way also issued on the ETH chain, making it already relatively easy to implement on nash.
I didn’t realized it was available on eth. Interesting. While I’m not a fan of Tether, I keep reading whatever I can find to gets some clues about if its really backed up. Certain opinions from academics and pretty reputable industry people (career professionals in finance etc) say that Tether is most likely backed up by assets that will be 1 to 1 usd like “30 day bonds”, and other assets that will be 1 to 1 but not immediately liquid.
Sounds like the situation is bad (not transparent, not immediately liquid) but not THAT bad (not fully backed 1 to 1).
Sounds like the situation is bad (not transparent, not immediately liquid) but not THAT bad (not fully backed 1 to 1).
I think the fact that there is even the slightest bit of doubt is enough for most to say the risk is not worth the reward when it comes to stable coins.
Why use USDT when there is USDC which is fully compliant? USDC is being picked up by many reputable exchanges. The ones that want to play shady games will pick up USDT and in some cases list USDT against USDC for volume and wash trading.
Listing USDC over USDT is congruent with Nash values. The team have always exercised sound decision making with long term objectives in mind.
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I think you are correct. Also, i think that the large volumes trading in USDT is an illusion. The presentation by bitwise to the SEC last week (for their ETF application) showed that all the existing volume on pretty much every single exchange is fake and only about ten exchanges have real volume (this excludes the big Korean exchanges for various reasons). Of those ten exchanges, Bitfinex, Coinbase, Kraken, Bittrex, Gemini, Bitstamp, Poloniex (the main ones), have almost no USDT volume. Almost all their trading pair volume is with USD, EURO, JPY, BTC and ETH.
The only one that does do significant USDT trading is Binance - they dont have USD, EURO or other fiat pairs, most likely because they cant get the licenses to do so - because they are allergic to regulatory compliance.
Either way, I think the USDT volume is an illusion, so probably best to trade with regulated stable coins until Nash obtain a banking license.
It is not a comfortable feeling that NASH is not including a huge part of the daily trading volume, USDT markets that is, in their scope.
We are all comparing the potential volumes to current large exchanges etc, but if you drill-down on these volumes the most volumes are coming from USDT. What is left of this comparison then?
Regardless how you feel about USDT we cannot ignore that it embodies the largest part of the daily trading volume in the cryptospace!
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would love the team to add USDT too and we can tell that nash is aiming for large trading volume coins on nash exchange. However they have to be compliant with laws…If the law allows, the next thing we know is USDT would be tradable…
USDT is an interesting topic and I agree with everyone that this would draw heaps of volume to Nash.
However, the potential issue is Nash Exchange has presumably registered with FinCEN as a Money Services Business (MSB), and with that comes certain AML requirements; problem with USDT right now is it’s not formally audited so this seems to fall into a gray area (?).
For comparison, the following exchanges listed on the Bitwise ETF/SEC PDF trade USDT (top 3 have fiat on/off ramps):
- Kraken
- Bitfinex
- Bittrex
- Poloniex
At the moment, I don’t see any reason why it would be restricted from trading on Nash.
Why should nash implement/list USDT?
Its legal status is questionable. Also the argument of liquidity is nonsense for me.
I think we all can agree on the point that a stable coin is needed.
In my opinion it doesn’t matter which stable coin is used for trading pairs, the traders will use it.
When there is no USDT listed, people will automatically use the option of the available stable coin. It doesn’t matter to them, if it is USDT or USDC. It is just important to them that the coin is stable.
On other exchanges people are forced to use USDT, because USDT has the most liquidity there. But it is just a tool for the exchange. Nearly no one is transferring USDT to his or her personal wallet.
Because the volume of USDT is just ‘inside’ the exchange, I don’t think that listing USDT will bring volume to an exchange. I think the same amount of volume will also be created with any other stable coin which is listed instead.
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Liquidity is the only reason to list USDT, more liquidity supports more traders with larger position sizes which leads to larger trade volumes, inversely less liquidity supports fewer traders with smaller position sizes leading to smaller trade volumes.
The more liquidity there is the less slippage you get and therefore you can use larger position sizes with lower risk. Yes traders will use whatever is available but the volumes will be lower if the risk is higher (slippage is greater). Also running stops in illiquid markets is much easier and requiers way less capital, anyone who’s placed their stoploss against a TUSD pair instead of USDT will know what I’m talking about.
Low liquidity is fine when the market is stable however since crypto is super volatile there’s always a need for a safe-haven when things go south. When everyone’s running for the door they’ll want to have a deep orderbook so they can exit their position with the smallest amount of slippage possible, a stable coin that’s illiquid is not stable in this scenario.
There’s a difference between using a stable coin to have a “cash position” (read savings) vs using a stable coin to “exit a position”, if you really want to be smart use the liquid less legally compliant stable coin (USDT) to exit your position then trade that for the legally compliant (USDC) stable coin to establish your cash position / savings.
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Tether may have the largest volume of stable coins however it is also the most controversial. If it collapses it will be a very good thing it is not listed on Nash. Best to stick to tokens are are not possible scams and are audited and backed by real USD.
That argument is definitely valid, however last time it almost collapsed everyone holding Tether just moved it straight into BTC driving loads of volume, so for the exchange itself that’s not necessarily a bad thing.
Nash’s reputation doesn’t directly equate to that of Tether assuming the masses can differentiate between a market that offers a product and the product itself. (less so for Bitfinex I’d assume)
Also I’d like to know how Tether can actually collapse if there’s no off-ramp and users can’t convert their USDT to USD there’s no way to have any kind of “Bank Run” on Tether. Does that only leave the market’s perception of it’s value (read the illusion of Tether having value) switching from “Tether is bad” to “Tether is worthless”? Assuming that’s the case what’s the difference between Tether and USD itself?
Thoughts?
Personally I’d like to see one of the Gold backed tokens become widely adopted and liquid negating the need for Fiat-backed tokens altogether. Preferably one that allows users to take physical delivery.
I agree with this. USDT is almost never sent between exchanges. It’s used as a stable coin within an exchange. People will use whatever is there. I really don’t understand the argument that Tether will bring liquidity.
This statement is false Tether is shady yes but not illiquid, sauce on page 37.
Also Binance has a ~$730m Tether balance, USDC has a ~$250m market cap the maths here is quite simple, but who knows if Tether dies maybe Binance will die along with it…
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Thanks. Touche. Was naive of me to say “almost never” based only on my own trading experience. Still I feel more safe knowing that the more compliant USDC is used.
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I agree with you that there need to be a liquid market with a stable coin to lower slippage effects and where you can exit your position without worries. When you start talking about ‘exit a position’ and a ‘cash position’ I see that this is kinda smart way, but it is definitely not user friendly.
The diagram you have posted doesn’t tell me a lot. I see that a big amount of USDT got distributed over several exchanges. It is in a time frame from the Thether genesis block till the 31 march 2018. Basically all transactions that have happen to the bigger exchanges. Due to the diagram we cannot say if this has all happened at the beginning, in the middle or at the end of the time. We don’t know when the volume occurred. So we also cannot say if USDT is liquid between exchanges. It was because it need to get distributed to the exchanges (otherwise people can’t trade there against USDT), but if it still is I won’t bet on it.
Overall I just want to say:
I think it doesn’t matter, if USDT, USDC or any other stable coin will be the initial stable coin of the exchange. Liquidity won’t be generated through a stable coin. A stable coin cause liquidity because it is an essential need of a trader.
I understand your points. Thank you for elaborating your opinion.
What do you think of traders that avoid USDC and favor USDT? There are (large) investors out there that (for their own reasons) avoid USDC, right?
however last time it almost collapsed everyone holding Tether just moved it straight into BTC driving loads of volume
Yeah if you’re referring to the event that happened in mid October 2018 when Tether pumped BTC because of unconfirmed rumors that Binance would delist USDT, I remember that. The issue is though that Tether was never in danger of collapsing at that moment so we can’t assume that is how things would play out in a real collapse.
The question is if Tether were to collapse would people be able to have time to sell their Tether into BTC in any significant quantity. What would a stable coin collapse really look like? We’re not sure as it has never happened yet, however I would assume it would be similar to BitConnect’s collapse, when real news is received that Tether is insolvent or for example “Tether Limited” has been shut down by the US government. People will dump their Tether against other crypto pairs for pennies just to get out and the price of tether will crater in a flash. Some will wake up in the morning to find their tether holdings -95% with no chance of ever being made whole. If Tether is on Nash then there will be a lot of angry people and they will lash out. I don’t think it would be a good thing.
Personally I’d like to see one of the Gold backed tokens become widely adopted and liquid negating the need for Fiat-backed tokens altogether. Preferably one that allows users to take physical delivery.
That would be great. It would be nice to have something like a truly gold backed crypto but again transparency and audits would have to be preeminent. I look forward to the day when Bitcoin has become the stable coin.
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The point of the second screenshot demonstrating Binance’s Tether balance to be 3x the entire market cap of USDC proves that USDC wouldn’t be able to meet the needs of those traders i.e. provide the same depth to orderbooks and support the same volume of trades due to USDC’s limited supply.
One way to solve this might be to have all USDC purchases via the fiat on-ramps mint new USDC tokens thus increasing USDC’s market cap / circulating supply. I’m not sure if that’s even possible but if it is I’d like to see the team pursue such a solution.
I’m also looking forward to the day Bitcoin becomes the stable coin and if we can use a transparent, audited, gold backed token that offers physical delivery in the meantime that’d be great!
Ultimately it’ll come down to the legal implications of listing Tether and the teams decision, but I think it’s been worth discussing the pros and cons as well as getting a feel for what the community thinks.
@Symiaq & @Moon thanks for the feedback, analysis and insight I’m impressed by the well thought out responses in this thread and in the community forum in general. The team’s decision to have a barrier to entry, good community management and guidelines seems to have kept out the trolls for the time being, resulting in a community that’s one of the better corners of the internet / crypto space thus far.
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Guess this settles the debate. When criminal charges?
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