"Many [stablecoin] white papers are obfuscated with jargon—terms left undefined and used inconsistently across other projects and the financial literature. In other cases, system components appear to be mislabeled. For example, a component that clearly meets the definition of a security or a derivative might instead be labeled a bond or a loan. "
Tron launches its own MakerDAO-like stablecoin system
The Tron Foundation has launched its own MakerDAO-like stablecoin system called “Djed.” The USDJ stablecoin will be generated through decentralized smart contracts on the TRON network. Anyone can pledge TRX as collateral to generate USDJ, which is pegged to the US dollar through Collateralized Debt Positions using autonomous feedback mechanisms.
USD Stablecoins Are Booming But Have Business Headache
For now, it seems more likely that operators will try to build (and charge) adjacent businesses made possible by these stablecoins instead of passing on costs [of negative interest rates] to retail users, e.g. via inflating the token supply relative to deposits as a form of usage tax, or implementing an additional transaction fee (PAX already does this for its gold-backed token.)
Stablecoin Market Caps Swell Over $7 Billion - Volumes Surpass Most Trading Pairs
While most digital assets have been suffering, stablecoins have been surging since the market downturn in mid-March and tether (USDT) is capturing more than 70% of BTC trades today. Besides tether, a wide range of other dollar-pegged cryptocurrencies have also benefited this month, as the market valuation of eight different stablecoins combined is well over $7 billion.
SEC Claims Telegram Injunction Applies to ‘Any Person or Entity’
The U.S. SEC has opposed Telegram’s request for clarity regarding the geographic scope of a court injunction barring the company from distributing its Gram tokens.
Telegram Pushes Back, Says SEC Still Dodging Its Morrison Argument
Telegram filed a response to Judge Castel dated March 31, writing that the SEC’s injunction earlier today was unwarranted. Further, they are asking the federal court to deny the regulator’s motion to enforce a total ban, adding that Telegram’s request is not “procedurally barred.”
Biggest Winner in Crypto Crash Is Most Controversial Coin
Anecdotally, some non-U.S. traders have told me that they actually prefer the more lightly surveilled Tether because they feel that it’s less likely that their coins get arbitrarily frozen for violating the terms of service.
‘Completely pointless’ Maker Foundation to dissolve
MakerDAO founder Rune Christensen unveiled proposals that will effectively cause what he believes has become a “completely pointless” Maker Foundation to dissolve over the next few years.
EconStor: Stablecoins as a crypto safe haven? Not all of them!
This paper tests the safe haven properties of the largest stablecoins against non-stable crypto-assets. The dataset comprises high-frequency 1-minute data calculated as volume-weighted averages across 18 exchanges where these crypto-assets are traded, thus capturing the entire price movement around the world. It finds that only TUSD, PAX, and GUSD can serve as safe havens.
MakerDAO founder Rune Christensen planned to make the MakerDAO Foundation obsolete by end-2021. It may take a bit longer but recent moves suggest the organization really is serious about shutting down. First, it turned control of the supply of undistributed governance tokens, MKR, over to MKR holders at large. Then Christensen detailed a three-plank plan that would get community governance to the point where MakerDAO users wouldn't even notice when the foundation shuts its doors.
'Libra competitor' Saga token holders can now earn up to 9.9% annual interest
Saga Monetary Technologies has listed its token SGA on crypto lending platform Celsius Network. SGA coin holders can earn up to 9.9% interest, and borrow cash or stablecoins against their SGA at rates as low as 3.45% using their assets as collateral.
FSB consults on regulatory, supervisory and oversight recommendations for “global stablecoin” arrangements
The Financial Stability Board (FSB) today published for consultation 10 high-level recommendations to address the regulatory, supervisory and oversight challenges raised by “global stablecoin” arrangements.
Maker Foundation Faces New Lawsuit Demanding $28M for Black Thursday Liquidations
A new class-action lawsuit against DeFi giant the Maker Foundation alleges that the company misrepresented the risks investors in the ecosystem faced, leading to catastrophic losses of collateral on MakerDAO on March 12. The complaint, which was filed in the Northern District Court of California on April 14, accuses three entities affiliated with Maker of negligence and intentional misrepresentation before investors, or “collateralized debt position holders.”
$1 Billion of USDT Is Sitting on Binance, and That’s Big for Crypto
According to data shared by Jason Choi — a Wharton School graduate that is the Head of Research at crypto hedge fund The Spartan Group — there is now just shy of $1 billion worth of Tether “sitting on the sidelines on Binance alone.” This doesn’t count the other stablecoins that platform supports, including Binance USD, USD Coin, Paxos Dollar, and more.
Stablecoins Printer Going Brrr Since BTC Lows; Dollar's Global Shortage Driving the Demand?
Ever since Bitcoin crashed to $3,850 in mid-March, fiat-backed stablecoins have been printing like crazy, with their market cap growing at a fast speed. During this time, the market cap of Paxos has surged 20% and USDT’s 40%. While Circle and Coinbase’s USDC market cap jumped 55%, Binance’s stablecoin BUSD saw the biggest spike of 85%.
Libra White Paper | Blockchain, Association, Reserve
The new Libra white paper is intended to be a stand-alone update regarding the plans of the Association. Additionally, supporting technical papers also published in June 2019 have been edited or retired. Key changes from the June 2019 white paper include single-currency stablecoins in addition to the multi-currency coin, forgoing the future transition to a permissionless system, enhancing payment safety with a robust compliance framework, and building strong protections into the Reserve design.
Libra Scales Back Global Currency Ambitions in Concession to Regulators
Libra still intends to issue a multi-currency stablecoin, but it would be backed by the new stablecoins, rather than directly by fiat currencies held in a bank. The new model limits Libra’s flexibility, since adding (or removing) a currency from the basket requires issuing (or retiring) another digital token.
Libra Just Made a Bunch of Changes to Play More Nicely With Regulators
Libra has applied for a payment system license from Swiss regulator FINMA (Swiss Financial Markets Supervisory Authority). This is a huge milestone on the way to some publicly usable Libra payments system, but there is still work to be done. Libra’s licensing process will continue to require input from other central banks and financial regulatory authorities around the world.
Libra Association: FINMA licensing process initiated
"The Swiss Financial Market Supervisory Authority FINMA has received an application from the Geneva-based Libra Association for a payment system licence. This marks the start of the licensing process under Swiss supervisory law. The outcome and duration of the procedure remain open."
Libra Compromises Undermine Original Facebook Promise
"Instead of focusing on the freedom of developers to build what they want, the new version of libra focuses on individuals’ ability to own their own keys. Unlike banks, which hold money on behalf of users, making the funds much easier to freeze or seize, libra will seemingly give owners the option to hold their own private keys, an important feature to many cryptocurrency hardliners whose mantra is “not your keys, not your bitcoin.”"
This column argues that aggregate stable coin issuance does not drive crypto prices, in contrast to claims from previous studies. Instead, it claims that issuance behaviour can be explained as maintaining a decentralised system of exchange rate pegs and acting as a safe haven in the digital asset economy. The latter can be demonstrated by the significant stable coin premiums during the COVID-19 panic of March 2020.
Using a rich dataset of signed trades and order books on multiple exchanges, we examine how peg-sustaining arbitrage stabilizes the price of the largest stable coin, Tether. We find that stable-coin issuance, the closest analogue to central-bank intervention, plays only a limited role in stabilization, pointing instead to stabilizing forces on the demand side. Following Tether’s introduction to the Ethereum blockchain in 2019, we find increased investor access to arbitrage trades, and a decline in arbitrage spreads from 70 to 30 basis points. We also pin down which fundamentals drive the two-sided distribution of peg price deviations: Premiums are due to stable coins’ role as a safe haven, exhibiting, for example, premiums greater than 100 basis points during the COVID-19 panic of March 2020; discounts derive from liquidity effects and collateral concerns.
Rep. Sylvia Garcia, a member of the House Financial Services Committee, said Thursday that the consortium's revised roadmap "does not address the concerns I raised" in the past. "I will continue to work to make sure that the SEC regulates any such asset as the security that it is under current securities laws," Garcia said.
First Mover: Stablecoin Surge Might Herald Bitcoin Binge
In the past month, the outstanding value of the top six dollar-linked tokens has surged by more than 25 percent to about $8 billion, according to CoinDesk Research.
Circle CEO Claims 'Explosive' Stablecoin Demand From Everyday Businesses
"U.S. dollar-backed blockchain tokens are surging in popularity around the world, and this time much of the demand is for payments in normal business transactions, not just to move money quickly between cryptocurrency exchanges. Over the past several weeks, Circle have seen explosive interest and growth in USDC. There is clearly very significant global demand for digital dollars, and the use of digital dollars as a new payment medium."
Why This Global Crisis Is a Defining Moment for Stablecoins
Over the past month, stablecoins have lived up to their moniker and value proposition. We’ve seen a flight from traditional crypto assets to stablecoins similar to 2018. The market cap of all stablecoins has swelled from $5 billion at the start of the year to above $8 billion in April. And the improved stability and usability of stablecoins equips them to rise to the occasion and prove utility beyond demand from exchange arbitrage and safe haven appeal.
Synthetix Explores Adjusting sUSD Liquidity Incentives with SIP 51
Synthetix – the permissionless derivatives protocol – is exploring adjusting its economic incentives for liquidity providers across sETH and sUSD pools. sETH acts as the primary on-ramp for Synthetix users, sUSD also acts as a critical off-ramp. Therefore, there must be high confidence (and liquidity) in the stability of the sUSD peg at $1. The added SNX incentives to Curve will aid in sUSD maintaining its $1 peg and assurance for liquidity providers that the incentives will exist in the long term.
Emin Gün Sirer's AVA Labs Seeks Wall Street Business After Open Sourcing 'Avalanche' Protocol
As first envisioned in a 2018 white paper by the pseudonymous “Team Rocket,” the Avalanche protocol uses random network sampling to reach consensus. But it is AVA Labs' (www.avalabs.org) ambition in building new infrastructure for the financial markets that now drives the firm forward.
Why MakerDAO Should Consider Negative Interest Rates for Dai
Since COVID-19 smashed into markets on March 12 the price of Dai skyrocketed as high as $1.50. It has since retreated to a range of $1.01 – $1.03, but it has now spent a full month above its $1 peg – and shows no signs of returning. A negative stability fee would encourage more people to become indebted to the Dai system. This would increase the supply of Dai, and in doing so reduce upwards pressure on the peg.
Heifer International, a nonprofit organization focused on global hunger and poverty issues, has joined the Libra Association, citing the project's potential to help poor farmers access credit.
