Because bitcoin is pristine collateral in the crypto verse, and soon probably in the mainstream area.
Not with volatility. When looking at how the lending world works, especially short term, when something is volatile, it is crap collateral.
Would you want to make a loan against collateral that could drop 10% in a day or two?
As for the backing, it truly isnt. This is more putting it in the general Treasury. I know it was slated as a backing, but I am not sure the idea of paying out in BTC if the peg drops to low is even possible. As Smooth pointed out, there are technical issues at every level.
However, the focus needs to be upon the idea of making HBD the stable asset and then collateralizing off that. Instead of using something else for our purposes, we do it ourselves.
The "golden nugget" of stablecoins, my latest articles describes how we go about that.
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