Stablecoins could ultimately completely change the way governments fund themselves, bypassing the bond market, the fractional reserve banking system and central banks.
Imagine that the US Government can directly issue a new yield bearing stablecoin called USDX. Let's assume it is on Ethereum, but this concept will work on any chain.
There is a staking smart contract, run by the US Treasury, where users can stake USDX over time and get a rate depending on how long they stake. Stake for a day and get a 3% rate, stake for a year and get 5%. The Treasury sets these rates and they can change at any time, at the pleasure of the treasury.
USDX is available worldwide, not just in the USA. There is no Fed constraining the staking rates. Users can come in to the Treasury portal, deposit USDC or other approved stablecoins and get USDX. The treasury can use this USDC to pay its bills, or use USDX directly bypassing the need for other stablecoins.
USDX becomes a type of hyper-liquid bond, issued on demand without auctions by the smart contract staking system. It becomes legal tender, in effect the new US Dollar CBDC.
> Inspired by post of @HodlMaryland and discussion (which I haven't listened to yet by @BitPetro )
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