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Comment by JumpCrisscross | Hacker News Reader

> by .gov pulling a Tornado Cash on all the underlying centralized collateral locked up in DAI

I doubt the U.S. would simply blow up stablecoins. (Unless e.g. the Kremlin is buying Iranian munitions with it and nobody does anything to stop it.) That said, coming regulation will likely require elements of KYC. That could result in enforcement actions or users in back-of-mind countries getting locked out.

All of which sidesteps dollar stablecoins relying on the dollar for their stability, not anything crypto.

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What's the value proposition of DAI with KYC?

There are plenty of folks who are comfortable with KYC but also want to use dollars as cryptocurrency.

Cornerstones of Dai is decentralization and peer-to-peer wallet transfers. How do you think KYC/AML is implemented under that paradigm, and do you foresee dai surviving it?

I can send DAI to my friends in Europe cheaper than an international wire.

My real name is connected to my wallet publicly, I have no issues with KYC for my own wallets.

I still find stable coins useful.

how does a decentralized coin implement KYC for a wallet-to-wallet transfer like you mention?

the KYC comes during off ramps back to the fiat system.

the exchange i use has already KYC'ed me intensively and they know which wallets i use.

>>how does a decentralized coin implement KYC for a wallet-to-wallet transfer like you mention?

>the KYC comes during off ramps back to the fiat system

And here we have your answer. It doesn't. In fact using your own logic, I could argue Tornado Cash is KYC'd 'because at offramp' which of course is absurd.

Now that you've made it crystal clear your use case does not include dai implementing KYC, I return to my thesis: DAI is imminently dead by .gov pulling a Tornado Cash on all the underlying centralized collateral locked up in DAI.

time will tell

i wonder if there is a /remind me in 5 years feature on hackernews

I hope you're right, but we seem to be sliding further into the dystopia, not out of it. Notice as time marches on the shrinking number of 'blacklist' FATF countries and the end of non-KYC/AML finance world-wide. IMO dai will go the way of bearer bonds and shares. The fact that all that underlying capital is in real-world bonds/paper/notes means cooperative financial task forces have these stablecoins by the balls and soon they will start squeezing.

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