APY is determined by supply and demand, nobody would take out a loan in marked valued cryptocurrency, what if it goes up? You might never be able to pay it back. Stable coins on the other hand will go down in value always pegged to fiat currencies which makes them interesting to loan.
Keep in mind that unlike real fiat, these stable coins can't just be printed out of thin air by some central authority. At least not DAI and similar which are fully decentralized. Every lend out stable coin needs to be backed 1:1, and this is why the APY rates are so high.
Makes perfect sense to store your wealth in DAI (ethereum blockchain) and earn 12% APY instead of having them in a bank account where they can be frozen and you have to pay the bank for the "service". If you don't plan to invest for a while.
Also check out PAXG, a stable coin backed by gold, why does it have so high APY? by your logic that means the government controls the physical gold as well.
APY is determined by supply and demand, nobody would take out a loan in marked valued cryptocurrency, what if it goes up? You might never be able to pay it back. Stable coins on the other hand will go down in value always pegged to fiat currencies which makes them interesting to loan.
Keep in mind that unlike real fiat, these stable coins can't just be printed out of thin air by some central authority. At least not DAI and similar which are fully decentralized. Every lend out stable coin needs to be backed 1:1, and this is why the APY rates are so high.
Makes perfect sense to store your wealth in DAI (ethereum blockchain) and earn 12% APY instead of having them in a bank account where they can be frozen and you have to pay the bank for the "service". If you don't plan to invest for a while.
Also check out PAXG, a stable coin backed by gold, why does it have so high APY? by your logic that means the government controls the physical gold as well.