DFC

A New York Supreme Court Appellate Division filing claims that Bitfinex and Tether (which share executives and shareholders) had gradually been depleting the reserves backing Tether's USDT stablecoin, by first by going from actual cash in hand to $625 million in an inaccessible Crypto Capital account, and then by replacing that with a $625 million IOU from Bitfinex. That debt, said the NYAG, “seemed unlikely to be repaid,” as Bitfinex required the funds for withdrawals on its exchange.

Libra is actually a revamped version of a much older payments model. In 1996, Douglas Jackson, an oncologist and fan of the gold standard, founded a payments system called e-gold. Backed one-to-one by reserves of the yellow metal, the e-gold system allowed users all around the world to make instant private electronic payments. Unfortunately, e-gold ran into problems with regulators...

Payments startup Circle is pivoting its business to solely offering stablecoin services with the sale of its OTC trading desk. As part of the move, the firm confirmed the departure of additional executives, just weeks after co-CEO Sean Neville announced he would be stepping down.

The Council and the Commission state that no global "stablecoin" arrangement should begin operation in the European Union until the legal, regulatory and oversight challenges and risks have been adequately identified and addressed.

The Libra Association has published its second roadmap for Libra Core, the key software that underpins the planned Libra network.

In recent years, Tether issuances have increased significantly, which correlated broadly with a significant rise in Bitcoin valuation. This paper examines the impact of cryptocurrency issuances on subsequent cryptocurrency returns. It is argued that as Tether is the undisputed ‘stable coin’, the minting of new Tether acts similarly to monetary expansion in cryptocurrency markets, inflating the prices of Bitcoin. We construct a VAR model and show contrary to investor expectations, Tether issuances do not impact subsequent Bitcoin returns, however, they do impact traded volumes. We also document an increase in Tether trading following a subsequent decrease in Bitcoin returns.

"CarbonUSD, or CUSD for short, is a compliant fiat-backed stablecoin where users can deposit and withdrawal real USD. To mint new CUSD tokens, users can make fiat deposits via ACH or Wire Transfer with our financial partner, Nevada-based Prime Trust. Frequent third-party attestations by leading auditor Cohen & Co. verify publicly that each token is backed 1-to-1 by escrowed funds in FDIC-insured accounts with Prime Trust’s banking partners."

"Despite high hopes, it is difficult to see how technology can hasten the creation of a “synthetic hegemonic currency”. Trade and financial contracts continue to be denominated overwhelmingly in a single currency, rather than a basket of currencies. For such a public synthetic alternative to work, central banks, whose currencies underlay it, would have to co-ordinate to ensure its stability and reduce perceived risks. But global needs can conflict with monetary policy objectives at home, significantly reducing the attraction for leading reserve currencies to participate."

"We explore the interplay between trade invoicing patterns and the pricing of safe assets in different currencies. Our theory highlights the following points: 1) a currency’s role as a unit of account for invoicing decisions is complementary to its role as a safe store of value; 2) this complementarity can lead to the emergence of a single dominant currency in trade invoicing and global banking, even when multiple large candidate countries share similar economic fundamentals; 3) firms in emerging-market countries endogenously take on currency mismatches by borrowing in the dominant currency; 4) the expected return on dominant-currency safe assets is lower than that on similarly safe assets denominated in other currencies, thereby bestowing an “exorbitant privilege” on the dominant currency. The theory thus provides a unified explanation for why a dominant currency is so heavily used in both trade invoicing and in global finance."

"Most trade is invoiced in very few currencies. Yet, standard models assume prices are set in either the producer’s or destination’s currency. We present instead a ‘dominant currency paradigm’ with three key features: pricing in a dominant currency, pricing complementarities, and imported input use in production. "

The Bank of Russia has reportedly started testing stablecoins pegged to real assets in a regulatory sandbox.

Proposals for global stablecoins have put a welcome spotlight on deficiencies in financial inclusion and cross-border payments and remittances to emerging market and developing economies. This column, part of the Vox debate on digital currencies, argues however that stablecoin initiatives are no panacea. Moreover, they pose particular development, macroeconomic and cross-border challenges for emerging market and developing economies. It remains to be seen whether stablecoins can offer a decisive comparative advantage over fast-moving fintech innovations in these countries that are built on or improve the existing financial plumbing.

The Libra Association has set up a 5-member “Technical Steering Committee” to oversee the development of the stablecoin project.

Binance has launched a function allowing users to instantly convert from other stablecoins into BUSD. The ratio to convert PAX, USDC and TUSD into BUSD will be set at 1:1 with zero fees. The ratio to convert USDT into BUSD will vary based on the current market price.

Vodafone is no longer part of the Libra consortium. Vodafone will dedicate resources previously intended for Libra to its well-established and successful digital payment service M-Pesa, which the company plans to expand beyond the six African nations currently served.

Pornhub now supports Tether to allow instant and zero-fee payments via the TronLink crypto wallet and browser extension. TronLink is a native wallet for Tron (TRX). The USDT token became available on the Tron network in April 2019.

Libra is analogous to a currency-board regime. And yet, Libra’s proponents have so far overlooked the problems of monetary management that a currency board raises.

A study of USDT turnover reveals just how crazy the demand for Tether’s stablecoin is. According to Coinmetric’s tweet on January 31, they reported that every single USDT token changes hands roughly 46 times every year. The trend of increasing activity shows that Tether is instrumental to liquidity flows between exchanges. It’s most likely that USDT changes hands most between multiple exchanges as opposed to individual traders.

Japan’s Line social network, the largest in the country, has announced the launch of its digital currency ‘Link’ in the Japanese market from April. The token has previously been available in all countries except Japan and the US.

Compliance appears to have been the primary cause for MasterCard's decision to leave Libra. The Libra association’s key members reportedly refused to commit to “not do anything that is not fully compliant with local law.” Specifically, Banga pointed to anti-money laundering, know your client and data management regulation. Another concern was Libra’s business model. The association does not make it clear how it would make money, with Banga noting that “when you don’t understand how money gets made, it gets made in ways you don’t like.”"

Ethereum is the world’s dominant network for stablecoins and it is still growing. However, with more transactional value taken up by them than ETH itself, is this such a good thing?

This paper analyzes high-frequency data of the six largest stablecoins by market capitalization and finds strong evidence of excess price variations. It identifies Bitcoin as a source of this excess volatility as stablecoin returns, volatility and volumes are highly correlated with corresponding Bitcoin time-series. Importantly, it also finds evidence that stablecoins contribute to the excess volatility of Bitcoin.

Telegram, the messaging app company currently facing a legal fight with the U.S. Securities and Exchange Commission over its $1.7 billion token sale, revealed more details about the technical specifications underpinning its TON blockchain Wednesday.

"Libra’s current trials may mean that its introduction has been delayed. Many consider that it is by no means guaranteed to operate at all. But central banks are well aware that even if Facebook does not manage to bring its project to fruition, sooner or later someone else will succeed, and will introduce a private sector digital payment system. And the issues and implications for central banking, the commercial banking system and the wider economy that their current research has highlighted will not go away."

Telegram has been locked in a fierce legal battle with the US SEC, which wants to block the company’s initial coin offering and halt the launch of its Telegram Open Network, or TON, blockchain. But that hasn’t stopped the social network from pushing ahead with the technical details of its project. On Feb. 3, Telegram issued the latest version of its whitepaper for its TON blockchain.

Built on the Ethereum blockchain, the QCAD stablecoin is the work of Canada Stablecorp, a joint venture between Canada's largest cryptoasset manager 3iQ and blockchain player Mavennet Systems.

Major Canadian investment fund manager 3iQ and blockchain firm Mavennet co-launched a new regulated stablecoin pegged to the Canadian dollar (CAD). Developed by Canada Stablecorp, a joint venture between 3iQ and Mavennet, QCAD is the latest CAD-based stablecoin and was officially launched on Feb. 11.

After initially focusing on retail-oriented crypto businesses, Circle has been pouring more resources its so-called stablecoin known as USDC. In December, the Boston-based company sold its Circle Trade over-the-counter trading business to crypto exchange Kraken. It previously unloaded its Poloniex exchange.

The team behind Celo, C Labs, is combining the ethereum and Libra models with a $30 million war chest from the likes of Polychain Capital and Andreesen Horowitz (a16z).