Why aren’t they subject to supply and demand curves changing their price?
In: 11
Imagine if you could freely buy and sell Amazon gift cards, and that the price of Amazon gift cards was tracked on the stock exchange.
Because an Amazon gift card buys you whatever amount is on its face, the price of Amazon gift cards would always track pretty close to US dollars. No one is paying $200 for a $100 Amazon gift card. On the flip side, if you had a $100 Amazon gift card and someone offered you $50 for it, you’d say no, because you can buy $100 worth of stuff on the gift card.
So Amazon gift cards in my example are essentially a stable coin. Because they’re very close to cash, their value is very close to cash. In the case of stable coins, whoever makes the coin guarantees that you can trade in your coins for their equivalent value in $USD.
Latest Answers