In the latest installment of their multi-part series meant to help those who may need to transact privately in the course of their sensitive work, security expert Eric Wall details compares the properties of several popular stablecoins.
Stablecoins are designed to maintain a peg to an existing currency, usually the dollar. These are similarly experimental yet promising technologies for those who need censorship resistance but prefer to be insulated from the volatility that comes with using something like Bitcoin.
Eric explains why permissionless dollars are interesting:
Most digital dollars exist as entries in central databases, where your access to them as a user is at the mercy of the system owners. To provide you with this service, the system owners will almost always demand that you provide identifying information. Examples of such systems include banks, PayPal, Wechat Pay, Venmo, and Skrill. These operators in turn fall under the regulatory purview of the jurisdictions they operate in. As such, they provide little to no help in regions where usage of the dollar is not permitted or blocked by sanctions.
Stablecoins, by virtue of existing on cryptocurrency ledgers, are — perhaps to some amount of surprise — different. The entire purpose of cryptocurrency ledgers is to be without central system owners. As such, these coins can to varying extent slip through the cracks and into the hands of people who can use them without the blessing of their government. Because cryptocurrency ledgers do not typically embed the notion of people’s real-world identities in them, stablecoins can often be held by completely unknown users.
He goes on to explain the relevant risks and benefits of various stablecoin system designs. You can read the full piece here.