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Comment by csomar | Hacker News Reader

Coinbase/Gemini USD are US regulated. So... no.

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...)

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...

>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.

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.

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

Chuck-E-Cheese tokens are US regulated so... my point being of course that just because something is under US jurisdiction doesn't make it "good as gold" so to speak. The structure of the underlying implement is what matters.

Because regulation worked SO WELL in numerous cases anyone could name (Enron, Worldcom, Authur Anderson, Lehman Brothers...)

Yeah - everything is fucked so why do anything? Lets just sit here and criticize everything. And that is the life we choose to live.

That's pointlessly reductionist. Just because we can't do perfect means we should look at a steaming pile of dogshit like it's filet mignon.

The short term solution to "everything's fucked" is to stop making it even more fucked.

Glad that you are able to figure out the shortcomings in your comments. Be constructive vs. generalizing a few negative examples and taking a defeatist attitude to things.

> The short term solution to "everything's fucked" is to stop making it even more fucked.

That's not a solution, that's a vague sentiment.

Are you arguing with yourself?

Picking out a small handful of obvious failures is not a useful exercise for or against regulation. Regulation has had numerous incredibly life-chantingly beneficial effects on our lives. Thanks to the EPA, the rivers no longer literally catch fire. I'd trade one Enron for lakes of water instead of lakes of fire any day.

Regulation can be good, regulation can be bad, how you do it matters far more.

I'm not saying it's a bad thing - just that I don't trust it to cover my ass.

I trust it to keep the rivers from catching fire, and planes from falling out of the sky, and the front seat from falling through the bottom of my car.

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