Stablecoins are inflationary as far as they inflate their own supply.
Inflation is expansion of the money supply whether the Fed is creating dollars that are 'backed' by treasuries or whether stablecoins are 'backed.' The backing needs to be thought of separately.
Stablecoins are substitute dollars, not dollars themselves, and will never be dollars.
Stablecoin issuers gain the most by being able to create something for nothing and sell them for real assets.
Stablecoin partners who get the tokens first get the same advantage of the banks that get the dollars printed first.
Stablecoins are inflating faster than bitcoin and ether and most other cryptos.
Stablecoins are mainly used to buy other cryptos.
Stablecoin issuers that take in a dollar in exchange for token, aren't creating more dollars, they are creating more tokens. No dollar is created, it is just transferred.
PayPal isn't creating dollars out of thin air and lending them out. They aren't doing what banks are allowed to do.
Stablecoin issuers create token products out of thin air that are instinctually worthless.
Stablecoins are then 'backed.' This can be a promissory note, dollars, or equity.
The backing should be thought of separately from the creation.
The dollar creation and economy should be thought of separately from the stablecoin substitue money economy.
Massive cognitive dissonance for bitcoiners that have bitcoin and want the price to go up, but also believe in 'sound' money.
The reason that money is meant to be a commodity is because money should be a real thing that has a utility and a relationship (price) to other commodities.
Dollars aren't worth anything intrinsically- they aren't a commodity.
Cryptos aren't worth anything intrinsically- they aren't a real commodity.
Money in the sound sense, must be a real commodity.
Gold is also priced in dollars, because currently dollars are considered money, they just aren't 'sound.'
Gold priced in dollars, while it will affect the price of gold in dollars, gold still has an independent relationship to other commodities because it is useful and intrinsically valuable.
Cryptos can only be thought of in terms of dollars and not other commodities because it is intrinsically worthless.
Money, sound money that is, must have a utility, and have a relationship to other commodities otherwise the new money like dollars or crypto as it is created will present an exchange of nothing for something. Sound money- gold, as it is brought into the economy is an exchange of something for something.
Bitcoin mining, while it does take resources or capital to do, does not give the bitcoin independent value. Mining is spending dollars on something that is inherently worthless. Spending dollars does not automatically mean that you created something of value.
Bitcoin mining is wasting resources to create a product that is intrinsically worthless. I get that bitcoin has a price, but regardless of price, what is the relationship to other goods? What utility does it provide? What can you do with it? And transferring it to someone doesn't count- that is a service that requires more than just the tokens you control.
Inflation creates all kinds of industries that would otherwise never exist. It creates mal investments and false signals. If inflation is defined as expansion of the money supply, and bitcoiners think that stablecoins are a substitute money, then what do they think of the inflation or expansion of the stablecoin market?
