1 VMFXX has been $1 for decades, never budging, never moving. The regulations and infrastructure to support such a thing already exists and have always existed to anyone who has any clue about banks / finances at all.
So why haven't stablecoins been designed to act like MMFs (like VMFXX) ?? Answer: because the cryptocoin community does not want a MMF. Its the only explanation. The cryptocoin community wants 6%, 10%, 18%+ returns on their "stablecoins". And its impossible to do that with MMFs.
> The cryptocoin community wants 6%, 10%, 18%+ returns on their "stablecoins".
As far as I know the two largest stablecoins (Tether and USDC) do not pay any interest. The interest that some exchanges pay on stablecoin balances is because they lend them out and/or use them as collateral. But that does not have anything to do with the stablecoin itself. If VMFXX was tokenized on the blockchain it would be used in exactly the same way.
> If VMFXX was tokenized on the blockchain it would be used in exactly the same way.
I'm going the opposite direction here.
If Tether / USDC really wished to "prove that they have liquidity reserves", they should go to the US Government and get the "Money Market Fund" / "Money Market Account" stamp of approval. And then invite the banking regulators to come in and count all their reserves.
I don't disagree here. My point was just that the interest that you see on exchanges is not directly related to the stablecoins.
I'm not sure if there are any legal or regulatory issues that would prevent stablecoins from getting those certifications. Tether definitely looks sketchy, but USDC has regular audits with public results.
