Patrick on Nostr: Tbh I actually disagree with my argument here. I don't believe ecash is custodial; I ...

Tbh I actually disagree with my argument here. I don't believe ecash is custodial; I believe it's a shitcoin akin to the dollar being backed by BTC. The issuer can determine how much they back the token or make any rules for how they'll give out Bitcoin against it. There's also nothing that ties your original deposit to the ecash you receive. It has no tie to Bitcoin anymore than something like liquid.

I actually made this argument in an unsent opinion letter to the Kentucky Department of Financial Institutions when we were planning to launch a Fedimint. I believe that when someone gives you money that they're actually performing an economic transaction of buying a totally different asset. The asset has no ties to Bitcoin and as long as the mint doesn't make claims to be backing or custodying then they shouldn't be regulated as such.

I don't think this is necessary a bad thing as long as it's an understood element. I think there's a lot of value to mints in our current base layer situation. The tech could still allow scaling for a wide range of new functions that aren't possible/feasible on base BTC. That being said I look forward to more advancement that doesn't necessitate us living in an ecash world.