What if centralized exchanges delist algorhythmic Stablecoins?
The US Government, arguably the largest economic power in the world, has just released a paper on the topic of cryptocurrency regulation. And at the top of the list of concerns due to the Terra Luna disaster is algorhythmic Stablecoins like Hive’s HBD.
In short the report suggests banning them, so US citizens can’t own them.
Additionally the US Congress has taken up consideration of a bill in one of its subcommittees which has a draft law banning all algorhythmic Stablecoins.
If the US bans algorhythmic Stablecoins who will follow them?
The US has strong economic ties to many nations in Europe and Asia. I would expect many, if not all US Allies to follow the US.
In a world where governments are impotent against real threats they may flex their muscles against imaginary threats or perceived threats like crypto currency.
It doesn't take much imagination to conceive of a plan whereby all algorithmic stable coins are banned in the United States and then the US European allies and Asian allies follow the United States in this course of action.
It's easy to see how if United States takes this unprecedented action to “protect” its citizens. I put protect in quotes as I am not sure that would really be the overall intent, but that's what would be the advertised intent; to protect US citizens from financial loss from algorithmic stable coins in the wake of the Terra Luna disaster.
The next thing we would see is potentially the delisting of algorithmic stable coins from centralized exchanges seeking to curry favor with the United States government and both it’s European and Asian allies.
Hive Back Dollars being algorithmic stablecoins could see themselves not only become illegal in the United States, but also several countries in both Europe and Asia.
‘This would in turn trigger Centralized Exchanges, which are already under heavy pressure from government regulatory agencies to act. I think they will delisted algorhythmic stable coins from most exchanges.
Additionally, algorithmic stable coins are not the only concern the United States government crypto currency document has and the United States Congress crypto currency bill.
Both documents go after any Terra Luna type situations where a stablecoin can be redeemed for a cryptocurrency token. These bills not only suggest banning the algorithmic stable coins but also the crypto currency that back these algorithmic stable coins.
Which by definition would include Hive Backed Dollars and Hive as one HBD represents a dollars worth of Hive.
This type of relationship between a stable coin and a crypto currency is deemed too risky by the United States government's initial crypto currency paper and the U.S. Congress is initial draft bill regarding the currencies.
Thus HBD and high could be banned or made illegal in United States and delisted from the centralized exchanges where they are now listed for trading.
This would be a huge blow to the HBD hive trading economy and owners of Hive Backed Dollars and Hive would find themselves scrambling for an exchange to move their assets to for safe keeping and trading.
The initial move of course could be to move them from the exchanges to the wallets, but then where would they move?
I propose a Plan B.
Plan B
One such place which I will call Plan B is Cubfinance on BNB Smart Chain, where stable coin pair HBD-BUSD lives and trading pairs between HBD and Cub, and Hive and Cub live. So perhaps HBD holders who have the majority of their assets on exchanges should consider moving some of those assets to Plan B Cubfinance now. After all if they want a healthy ecosystem to exist, they should support it.
Currently those trading pairs on Cubfinance enjoys a greater than 30% APR. This movement can be accomplished by the usual movements of crypto currency assets between blockchains or it could be accomplished easily by utilizing a pre-existing decentralized finance service on Hive called @easydefi.
Summary
We live in exciting times, everything is changing rapidly, and we must stay on top of these changes in order to protect our assets and the value they represent. Stablecoins have been the island of stability in the volatile cryptocurrency sea since the dawn of their birth. But the sudden premature death of one of the youngest and largest Stablecoins connected to the Terraluna ecosystem, and the subsequent bankruptcy of multiple other large crypto lenders which were tied to it creates the political pretext for harsh regulation. So be prepared, because proactive steps are always better then reactive ones.
