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A comment on The Bit Short: Inside Crypto’s Doomsday Machine. Parent comment

Re:The Bit Short: Inside Crypto’s Doomsday Machine by cameldrv on Friday January 15, 2021 @01:47PM (#25794544)
I think it does. People send USD to Coinbase to buy Bitcoin. Coinbase maintains the stable value of USDC by creating new USDC and selling it to people for BTC. The cash to back USDC comes from people depositing USD to buy BTC.

You can think of it virtually as three balanced flows:

USD -> USDC -> BTC (Retail BTC Investors)

BTC -> USDC (Tether refugees)

USDC -> USD (Coinbase)

[ Parent | on HN ]
Re:The Bit Short: Inside Crypto’s Doomsday Machine by jcfrei on Friday January 15, 2021 @03:48PM (#25796217)
> Coinbase maintains the stable value of USDC by creating new USDC and selling it to people for BTC.

If tou want USDC you can simply change your dollars on coinbase. No need for them to use their own funds to maintain a stable price - there's no usdc/usd market on coinbase.

[ Parent | on HN ]