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A comment on Coinbase is launching support for the USDC stablecoin. Parent comment

Re:Coinbase is launching support for the USDC stablecoin by lallysingh on Tuesday October 23, 2018 @02:23PM (#18286010)
Wouldn't the auction of stablecoins basically have to be at face value? Just by market forces: You don't auction dollars.

Then they'd just cash then in at coinbase, right?

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Re:Coinbase is launching support for the USDC stablecoin by JumpCrisscross on Tuesday October 23, 2018 @03:47PM (#18286781)
> Wouldn't the auction of stablecoins basically have to be at face value?

Almost certainly not. They would trade at a premium or discount, depending on a number of factors.

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Re:Coinbase is launching support for the USDC stablecoin by lallysingh on Tuesday October 23, 2018 @03:56PM (#18286862)
Which factors? Who'd buy them at a premium? Wouldn't any auction of >1 bidders stabilize at face value?
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Re:Coinbase is launching support for the USDC stablecoin by JumpCrisscross on Tuesday October 23, 2018 @05:11PM (#18287521)
> Which factors? Who'd buy them at a premium? Wouldn't any auction of >1 bidders stabilize at face value?

Think of the stablecoin as an ETF. If people need to launder money or take advantage of a programmatic bug, that would raise the stablecoin price over $1.

By default, I'd imagine the reduced liquidity and counterparty risk (relative to dollars) would cause the stablecoin to trade at a discount to cash, particularly when auctioned by the government. (You have to spend resources monitoring the auction, closing the transaction, and cashing out to complete the arbitrage.)

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