People are a bit confused about mica stablecoin regulation. While I think whole MiCA should be rejected as a whole, we have options.
The way I understand it is that Brussels does not like competition in money printing, so they disallowed stablecoins that are not EUR based and EUR based have to be printed in concert with Brussels-Frankfurt. But we are already printing both dollars and euros in the cyphersphere.
What this could mean in practice is ban on offering stablecoins on exchanges for European union customers and ban for businesses accepting these stablecoins.
Here comes a solution. People often confuse payment network and what is sent through the payment network. You can send USD or eur through visa payment network. You can send USDT through Ethereum, Liquid, ... The confusion is with Bitcoin, there is both Bitcoin payment network and Bitcoin as a unit.
I've long said that the best stablecoin is a short position on bitcoin coupled with the bitcoin. For an interesting trust minimized implementation, see DLC channels in @get10101.
So how does this relate to stablecoins? You can have a stabilized position denominated in USD, but still pay with lightning. Merchant does not have to accept stablecoin, if you want to spend stable value. This is between you and your wallet. You can send$100 over lightning - you go long (exiting the short position) and sent SATs worth $100. If the merchant wants to keep it in dollars, they can open a short, but that's the merchant's problem.
Lightning is uniquely positioned to do payments in this way. Settlement is instant and even the position exit and enter can be atomic. No other crypto payment network can do this. I've written about this feature in Orange Flash of Freedom, or see Roy (npub1ey6…szvp)'s blog (links in reply).
Another advantage of this way of value stabilization is that there a natural interest rate (called a funding rate). You should be paid for shorting Bitcoin. Well, should is a strong word, but you usually are, because people will pay to go long on Bitcoin.
I think whatever camp you are in, if you like stablecoins here or there, if you want BTC only, or if you are into alts, lightning is what connects it all.
Now someone should go and tell Coinbase commerce, they are a bit slow to get it.
juraj / Juraj
npub1m2m…r8p9
2024-06-28 13:17:48
Author Public Key
npub1m2mvvpjugwdehtaskrcl7ksvdqnnhnjur9v6g9v266nss504q7mqvlr8p9Published at
2024-06-28 13:17:48Event JSON
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"content": "People are a bit confused about mica stablecoin regulation. While I think whole MiCA should be rejected as a whole, we have options.\n\nThe way I understand it is that Brussels does not like competition in money printing, so they disallowed stablecoins that are not EUR based and EUR based have to be printed in concert with Brussels-Frankfurt. But we are already printing both dollars and euros in the cyphersphere.\n\nWhat this could mean in practice is ban on offering stablecoins on exchanges for European union customers and ban for businesses accepting these stablecoins. \n\nHere comes a solution. People often confuse payment network and what is sent through the payment network. You can send USD or eur through visa payment network. You can send USDT through Ethereum, Liquid, ... The confusion is with Bitcoin, there is both Bitcoin payment network and Bitcoin as a unit. \n\nI've long said that the best stablecoin is a short position on bitcoin coupled with the bitcoin. For an interesting trust minimized implementation, see DLC channels in @get10101.\n\nSo how does this relate to stablecoins? You can have a stabilized position denominated in USD, but still pay with lightning. Merchant does not have to accept stablecoin, if you want to spend stable value. This is between you and your wallet. You can send$100 over lightning - you go long (exiting the short position) and sent SATs worth $100. If the merchant wants to keep it in dollars, they can open a short, but that's the merchant's problem. \n\nLightning is uniquely positioned to do payments in this way. Settlement is instant and even the position exit and enter can be atomic. No other crypto payment network can do this. I've written about this feature in Orange Flash of Freedom, or see nostr:npub1ey6qdmvzcgcsr883m9nspzz0mm037l26xtardzcskfsvc6gc7jssm9szvp's blog (links in reply).\n\nAnother advantage of this way of value stabilization is that there a natural interest rate (called a funding rate). You should be paid for shorting Bitcoin. Well, should is a strong word, but you usually are, because people will pay to go long on Bitcoin. \n\nI think whatever camp you are in, if you like stablecoins here or there, if you want BTC only, or if you are into alts, lightning is what connects it all. \n\nNow someone should go and tell Coinbase commerce, they are a bit slow to get it.",
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