> A specific financial example of where custody might prove problematic even in a developed country (where your currency, government, and banks is not causing you financial hardship) is escheat laws.
Doesn't explain Tether, which does have custody. The market cap of Tether is something truly enormous. I just don't know why and what for.
Any explanation of stablecoins will have to explain the use cases and market cap of Tether.
Tether (USDT) is attractive to high-risk traders who are seeking high return and low exchange fees. This doesn't mean it is good or will remain stable indefinitely—I would not be surprised if it follows a similar path as UST. As it is an ERC20 token[1], it can be held and transferred in a non-custodial fashion as with most other crypto tokens, but with the caveat that it is run by a centralized entity and therefore your address could be frozen/blacklisted by their contract. The same is not true of all stablecoins; DAI cannot freeze an address, for example.
It might be hard to realize, but there are dozens or hundreds of stablecoins. Anybody can publish a new stablecoin as the blockchain is permissionless (literally: nobody needs permission to deploy a new ERC20 token). Obviously not all purported "stablecoins" will be safe, stable, or useful; but it also does not mean that every one will carry the same risks as UST and USDT. A government could issue a ERC20 token for example and it would largely be seen as "safe" with the caveat that it is centralized.
Doesn't explain Tether, which does have custody. The market cap of Tether is something truly enormous. I just don't know why and what for.
Any explanation of stablecoins will have to explain the use cases and market cap of Tether.