Stablecoins play an important role in the DeFi industry and helps immensely with liquidity of decentralized finance industry. However, the quirk you mentioned is particular to just centralized version of stavle coins. I feel like they do this in order to stay complaint with regulations.
A decentralized stablecoin like DAI doesn't have these type of mechanisms built in for censoring addresses.
The best thing to do is to not do anything with centralized stablecoin that would trigger addition to the blacklist or just use a decentralized stablecoin like DAI. Most of the addresses in those blacklists are addresses that contain hack funds.
A decentralized stablecoin like DAI doesn't have these type of mechanisms built in for censoring addresses.
The best thing to do is to not do anything with centralized stablecoin that would trigger addition to the blacklist or just use a decentralized stablecoin like DAI. Most of the addresses in those blacklists are addresses that contain hack funds.
Decentralized stablecoins might be an option. But most of them fail due to their inability to maintain the USD peg for long. No USD reserves = high risk of a collapse in the long run. I believe this applies for decentralized algorithmic stablecoins. I'm yet to see whenever collaterized stablecoins that are decentralized (eg: DAI, USDJ) will be able to maintain their peg forever. Life is all about risks, anyways.
Despite the on-going centralized stablecoin censorship, I don't think they will be going anywhere soon. Especially when most crypto exchanges and companies are behind them. They're better than traditional Fiat currencies because they can be frozen/manipulated at will. Not only that, but they're highly-programmable, allowing anyone to use stablecoins on "De-Fi" apps and more. I guess that's their main selling point over CBDCs (especially the programmability part). If stablecoin issuers only censor illegal activities on-chain, then should be nothing to worry about. But when things go too far, it's going to be a huge problem for everyone. Who knows if stablecoins will live alongside traditional cryptocurrencies for generations?
