At 16:44 in the video, he says Doesn't the market cap in stable coins come mainly from exchanging from a different cryptocurrency into the stable coin (with the stable coin issuer then creating new stable coins) and not from transfers from bank accounts?
In order to increase the supply of stablecoins, a deposit of fiat currency is needed For example, if an institution wanted $100M USDT coins and has a relationship with Tether, they would wire them the $100M (plus fees) and Tether will mint 100M USDT coins and send to the customer's wallet address To redeem the $100M in fiat currency, the same institution would request it from Tether and Tether would wire the money (fees settled per their agreement) and Tether will burn the 100M USDT (remove) from supply Not everyone can do either one of the two above. Must be AML/KYC and contracts certified by Tether Anyway, that first step, wiring $100M fiat currency to Tether means it was drained from a bank account somewhere. The balance of $100M was removed from the traditional banking system deposits Hardly anyone redeems USDT for fiat currency, hence the increasing supply and market cap of USDT. Same goes for other stablecoins like USDC, GUSD, PAXOS, and so on
What is interesting to me is that the EU already has plans for a digital Euro, China has almost implemented a digital Yuan, but there are no concrete plans for a digital dollar. Does anyone have any theories as to why?