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0 sats \ 1 reply \ @k00b 25 Nov \ on: cBTC: A Bitcoin-Backed “Stable Value” Concept — Looking for Feedback bitcoin
You say it's not another stablecoin but it is in fact a stablecoin, right? Else, what is it stable relative to if not a fiat currency like USD?
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0 sats \ 0 replies \ @anon 21h
You say it's not another stablecoin but it is in fact a stablecoin, right? Else, what is it stable relative to if not a fiat currency like USD?
Great question — and you’re right to challenge the wording.
cBTC is not a stablecoin in the traditional sense because it is not pegged to USD (or to any fiat currency). It doesn’t target a $1 price, it doesn’t use arbitrage bots, and there’s no issuer promising convertibility at a fixed rate.
So what is it “stable” relative to?
cBTC aims for relative stability inside the Bitcoin monetary system, not parity with fiat.
More precisely:
1. cBTC is “stable” relative to Bitcoin’s upside volatility, not USD.
It’s minted at 30% LTV against BTC, so instead of tracking the dollar, it tracks a fraction of BTC’s value. If BTC goes up or down 10%, cBTC moves far less because it represents only 0.3 BTC of exposure.
It's basically a dampened-volatility BTC unit, not a fiat-pegged instrument.
2. It’s not stable against USD inflation — it’s stable away from fiat.
Traditional stablecoins outsource monetary stability to central banks (USD). cBTC tries the opposite: It creates a Bitcoin-native unit of account that does not depend on fiat or external collateral.
You could say it’s “stable against fiat debasement” only because the collateral is Bitcoin — but that’s not the core design goal.
3. The goal is not price stability — it’s functional stability.
The intention is to give Bitcoin users:
  • a less volatile unit for payments,
  • without touching USD,
  • without trusting issuers,
  • without algorithmic peg mechanisms.
In short:
USD-stablecoins peg to the dollar. cBTC aims for a Bitcoin-native low-volatility unit.
So yes — you can call it a stablecoin if your definition is “asset designed to be less volatile,” but it’s not a USD-stablecoin, and it doesn’t behave like one. It’s simply a different species.
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