The folks on Hacker News seem pretty anti-crypto, but I feel like they're missing the point. If we're actually looking for ways to fix the US debt, stablecoins are definitely worth considering
Eg if Australian locals suddenly switch transacting cocaine at scale in Tether instead of AUD, the US government can borrow more money by providing that collateral to Tether.
Edit: Izzy Kaminska recently had a, as always, solid and less snarky summary at https://www.financialsense.com/blog/21379/redollarization-an...
The bonds are sold en masse, and the value of those bonds will be hit, driving up gov borrowing costs (plus they just lost a source of demand), meaning the stablecoin “bank” could be bankrupt, right?
With stable coins you’re really trusting a private company to invest your money in a way that is robust to a drop in confidence. Isn’t this high risk? If a coin gets large enough, is it a threat to government solvency?
But I guess we will find out in a 2027 Bessent presser announcing the Fed stepping in.
More serious answer: the bigger risk is trusting SV types to be content with a couple of percent in spread, and not starting to pull all kind of shenanigans to juice returns to a point where it becomes much harder to bail them out vs just taking back the treasuries.
US government solvency seems, as crazy as it sounds, less of an issue, as evidenced by the brief tantrums with absolutely no real effects beyond a couple of protesting headlines in the recent months. Where else are people around the world going to put their money? But as gifted as the current gov crew is at turning privilege into disaster, we're probably going to find out soon enough if there are any actual limits to that.
Second, Tether is not a regulated stablecoin in United States.