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Offline starspirit

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This is a question I've been struggling with for a while. Suppose it is possible to have the following:

(i) tokens that behave like at-call deposit accounts, where the token represents a holding of a varying number of units in the currency of denomination (e.g. USD). The number of currency units per token might vary with interest payments for example, just like a typical bank deposit, and

(ii) the protocol allows users with such deposits to make transfer payments specified as units of currency, with the system automatically calculating the equivalent deposit tokens that are transferred, and reporting of transactions and statements for both senders and receivers available in units of currency (as well as deposit tokens if preferred)

When merchants or others receive payments, they actually receive deposit tokens equivalent in value to the specified payment amount. If this functionality on a deposit account were possible, what would be the added benefit of having a cash token (e.g. bitUSD etc) that is also allowed to circulate freely? I appreciate any views on this. Thanks.

Offline monsterer

What is the difference between this token and a normal currency? Seems very close if not exactly the same to me?
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sumantso

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What is the difference between this token and a normal currency? Seems very close if not exactly the same to me?

Its costlier, for a start.

Offline starspirit

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What is the difference between this token and a normal currency? Seems very close if not exactly the same to me?

Sorry, I didn't provide any context for my question.
The difference is that it earns a yield on the deposit tokens.
The yield is market-determined to alter supply and demand and always target parity to fair value against the peg (assuming yields are not constrained at zero).
I don't see a reason why it should cost any more than currency.
And it still delivers cash-like functionality, unless there is some other reason to use cash. Hence my question.

Offline cylonmaker2053

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What is the difference between this token and a normal currency? Seems very close if not exactly the same to me?

Sorry, I didn't provide any context for my question.
The difference is that it earns a yield on the deposit tokens.
The yield is market-determined to alter supply and demand and always target parity to fair value against the peg (assuming yields are not constrained at zero).
I don't see a reason why it should cost any more than currency.
And it still delivers cash-like functionality, unless there is some other reason to use cash. Hence my question.

well bitassets are just synthetic versions of underlying assets, which have systemic risk exposure to the BTS network, plus there's still on/off ramp transaction costs to get off the network and into the underlying; that's at least the theory for why there should be some premium, at least at this stage. as bitassets gain popularity and the BTS network grows and proves itself robust to scale, then that premium over underlying should fall.

that said, there are reasons rational agents would use bitassets over underlying, and those mainly have to do with portability, low transmission costs, higher than underlying asset market yields, and evasion of domestic jurisdiction political risk (a real concern for many around the world).

Offline monsterer

Sorry, I didn't provide any context for my question.
The difference is that it earns a yield on the deposit tokens.
The yield is market-determined to alter supply and demand and always target parity to fair value against the peg (assuming yields are not constrained at zero).
I don't see a reason why it should cost any more than currency.
And it still delivers cash-like functionality, unless there is some other reason to use cash. Hence my question.

It might be better to 'just' make the token a plain currency, because otherwise (with negative yield), you'll have a negative balance of the token (which will be a difficult concept for users to understand), whereas if it were a currency, the value would just be lower relative to the pricing currency.
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