Japanese Financial Giant MUFG to Launch Digital Currency in 2020 - CoinDesk
Mitsubishi UFJ Financial Group (MUFG), is set to issue a digital currency in the second half of this year. The cryptocurrency will be issued in collaboration with Recruit Group, a major Japanese holding firm that operates restaurant-finding service Hot Pepper Gourmet and many more. The digital currency will be initially utilized in a smartphone payment app for member companies. Recruit has around 1 million member stores.
The WFE calls to address development of global stablecoins with a taxonomy
The World Federation of Exchanges encourages global standard-setting bodies to generate a taxonomy for all global stablecoins (GSCs) and crypto-assets. In adopting the use of a global taxonomy, a common understanding would develop of whether a GSC or crypto-asset fits a certain classification or definition (eg do the features of the crypto-asset meet the definition/classification of a security) which would, in turn, reduce the variance in application of regulation, to GSCs/crypto-assets, between jurisdictions. Whilst differences might remain across the globe in securities regulation itself, the fragmented approach to the type of GSC/crypto-asset which falls under that regulation would potentially be reduced. This results in a more universal application of regulation, especially if the principle of ‘same business, same risk, same rules’ is applied and is focused on regulatory objectives and outcomes.
This Gates Foundation note explores five open questions about whether stablecoins could promote financial inclusion in lower- and middle-income countries. The questions cover two practical issues concerning processing speed and technology available to the poor; costs to users; regulatory issues, especially compliance with existing customer funds protection rules; and implications for financial systems with limited foreign exchange reserves.
If the Financial Action Task Force (FATF) has its way, stablecoin payments networks will no longer be able to take a hands-off approach to knowing who their users are. In a July report to the G20, FATF suggested that “central developers and governance bodies of so-called stablecoins” should be treated either as financial institutions or as virtual asset service providers (VASPs). Hence, stablecoin platforms would probably have to abide by the FATF’s Recommendation 10, which prohibits financial institutions from “keeping anonymous accounts or accounts in obviously fictitious names.” Stablecoin platforms only currently apply customer due diligence to the small minority of users who purchase, sell and redeem stablecoins for fiat currency.
BiLira (TRYB) Democratizing Access to the Turkish Lira on Avalanche
BiLira will launch TRYB, a stablecoin backed by the Turkish Lira on Avalanche during the mainnet release. Previously, TRYB was limited to the Ethereum blockchain as an ERC-20 token. https://www.bilira.co/
Q2'20 Review: Stablecoins at the heart of DeFi boom
The story of stablecoins is the story of Ethereum. Driven by a global flight to safety amidst the coronavirus pandemic, stablecoin issuance ballooned over $8 billion in the first quarter of 2020. While inter-exchange settlement remains the most dominant use case for stablecoins by far, more generally, stablecoins are simply a better means of storing and moving dollars around the world. 24/7 uptime and relatively quick settlement allows users to react to market conditions much faster than when dealing with traditional payment rails. https://twitter.com/RyanWatkins_
Unite to Succeed: Swiss Stablecoin Association Hopes to Break the Ice
The goal of the newly-formed Swiss-based World Stablecoin Association (WSA) is to create a united front for the sector to tackle regulatory concerns and drive collaboration. A number of projects have already reportedly become members of the WSA, such as the Canadian dollar-pegged QCAD as well as decentralized finance protocol Ren, which is backed by Polychain Capital. Additionally, the Brazillian Digital Token (BRZ), Crypto BRL (CBRL), Peg Network, QCash (QC), Stably, USDK and Digitalbits (XDB) are also believed to have joined the initiative. https://www.worldstablecoin.org/
Facebook Financial to Pursue Payments and Commerce, Led by Libra's David Marcus
Facebook is forming Facebook Financial (called F2 internally) to oversee the all of the payment services Facebook has announced in the past year, including Novi and WhatsApp payments. Novi oversees the digital wallet for Facebook's proposed Libra digital currency. Novi head David Marcus will be in charge of the initiative, and former PayPal executive Stephane Kasriel is being brought in to head Facebook Pay and serve as payments vice president of Facebook Financial. Facebook Pay, launched in November 2019, can be used for P2P payments on Messenger and purchases from select Pages and businesses on Facebook Marketplace. Facebook has plans to add it to Instagram and WhatsApp in the future.
cLabs Acquires Summa to Boost Crypto Interoperability on Celo
Celo's cLabs acquired the decentralized finance (DeFi) startup Summa, best known for making wrapped Ethereum tokens that can represent locked amounts of bitcoin. Summa’s technical expertise in cross-chain architecture will enable seamless interoperability between Celo and various layer-one blockchains.
Unpacking the Avit, Avanti Bank's New Digital Asset Being Built With Blockstream
Avit will be commercial bank money or programmable electronic cash, redeemable at par with a U.S. dollar issued by Avanti Bank. It’s not a security token, or a digital representation of an investment that’s expected to generate returns. Unlike cash, stablecoins are generally issued as intangible assets, which means they aren’t physical or don’t derive their value from contractual claims like stocks and bonds do. Because of this, they have uncertain legal enforceability. Most U.S.-issued stablecoins exist under Article 8 of the Uniform Commercial Code, which requires they have intermediaries.
Facebook’s libra could disrupt collateral markets – IMF paper
"In the IMF working paper, called Privacy provision, payment latency and role of collateral, authors Charles Kahn, Caitlin Long and Manmohan Singh argue that digital currencies are analogous to collateral reuse, where securities are exchanged for cash. Looked at this way, central bank digital currencies (CBDCs) and commercial-bank sponsored tokens may be preferable to stablecoins, such as libra, which are issued by private companies without bank charters. "
Most USDT is used on centralized exchanges for arbitrage - profiting from price differences across exchanges. The way this is done in practice is that arbitrageurs first send USDT to their own wallet before sending to a different exchange. This is done to gain more control over and achieve lower transaction fees on USDT transfers between exchanges. Most of this activity takes place between Huobi, Binance, and Bitfinex. The data also highlights the flow of USDT from issuance to end use. All new USDT is first minted, then sent to Bitfinex, who controls the keys to the printer, before being transferred to other exchanges. In USDT’s entire existence on Ethereum Tether has never burned any supply. According to Flipside Crypto, USDT is by far the most dominant medium of exchange on Ethereum. There’s is over 7 billion USDT on Ethereum, yet only ~2 billion are considered active.
Crypto Assets of $50 Billion Moved From China in the Past Year
About $50 billion in cryptocurrency assets have left China in the past year, a possible indication that investors are dodging rules that limit how much capital they’re allowed to transfer from the nation, according to Chainalysis. Tether accounted for more than $18 billion of the outflows from East Asia in the period. Tether has become a U.S. dollar replacement for many people in China, with lots of Chinese businesses and merchants, especially those working overseas, now accepting Tether. https://blog.chainalysis.com/reports/east-asia-cryptocurrency-market-2020
Tether tops Paypal and Bitcoin for average daily transfer value
The average daily transfer value for Tether has surpassed that of Bitcoin and PayPal. According to CoinMetrics, Tether’s 7-day average adjusted transfer value reached over $3.55 billion as of August 20. This is around 20% more than that for Bitcoin which was a reported $2.94 billion. According to PayPal’s Q2 report, the daily average transfer value of the online payments giant was also less than Tether’s at $2.94 billion.
Libra replaces general counsel Robert Werner after 3 months
Former U.S. Homeland Security Department general counsel, Stevan Bunnel, has been appointed as Libra's general counsel. Since leaving the Homeland Security Department in 2017, Bunnell co-chaired the data privacy-focused legal practice O’Melveny & Myers until joining the Libra Association this month. The association’s former general counsel, Robert Werner is departing from the position after it became clear it meant he would have to relinquish an existing position on the boards of directors for Deutsche Bank Trust Co.
Coinbase, Circle unveil new upgrades to USDC stablecoin
Circle and Coinbase have announced an upgraded version of the USDC stablecoin — which is managed by the Centre Consortium — including the addition of so-called gasless sends. The "USDC 2.0" update will allow services that offer USDC support to pay transaction fees — known as gas on the Ethereum network — for their users. This allows developers to either provide that service themselves, or allows a third party service to pay the related fees, so developers can either pay the fees on behalf of the customer or present and deduct the fees in USDC. https://medium.com/centre-blog/centre-consortium-announces-release-of-usd-coin-version-2-0-37ee8b27e09b
'Gasless' Technical Update Brings USDC One Step Closer to Venmo
Dubbed USDC 2.0, USD Coin (USDC) has integrated what are called "meta transactions" natively to the dollar stablecoin platform. Now, users do not have to pre-fund their USDC-bearing wallets with ether (ETH) in order to send a transaction. Meta transactions allow USDC wallets and compatible applications to act as virtual "gas stations" by paying the associated mining fee that accompanies every Ethereum blockchain transaction. This [update] enables people to fund their non-custodial wallets with USDC and start using DeFi/dapps without also having to own ETH.
In world first, bank-issued stablecoin used at online retailer
The Sygnum Digital Swiss Franc (DCHF), which is pegged on a 1:1 basis with the fiat currency, was used to complete a payment for an Apple iPad at Digitec Galaxus, Switzerland’s largest online retailer. Coinify, a digital currency platform provider, enabled the sale to take place. Sygnum said its offering stands out against other stablecoin issuers such as Tether because it is a regulated bank—meaning one Swiss franc is verifiably held as collateral for every DCHF that is in circulation.
AMPLs and YAMs aren’t Monies; They are Gambling Technologies
It’s hard to see why Ampleforth (AMPL) or YAM could ever replace a dollar. While the price of these tokens is relatively benign, their quantity fluctuates wildly. So the total purchasing power of AMPLs (or YAMs) held in one’s wallet is quite volatile despite the purchasing power of a given AMPL (or YAM) being stable. Put plainly, these aren’t dollar substitutes. The main use case for AMPLs and YAMs is as tokens in a financial betting game. Think of them as an access point to a self-referential guessing game—that is, a Keynesian beauty contest.
DeFi stands for “Decentralized Finance”, which aims to recreate the traditional financial system with less, well, middlemen. Many of the traditional actions in the markets such as lending, borrowing, structuring derivative products, and the buying and selling of securities, can now be done through a decentralized open-source network. The vast majority of these applications are currently created on Ethereum, but in principle, other platforms with smart contract capabilities could work too.
Alex Lipton: What the Fed's New Inflation Policy Means for Stablecoins
Changes in the Fed’s policy open a real possibility for building the new economy based on programmable money and regularly complaint payment rails operating entirely (or mostly) outside of the existing banking system. The broad expansion of payment mechanisms will democratize finance and make it much more inclusive and equitable. It will also force banks to become more nimble and agile to remain economically relevant.
MakerDAO Eyes Adding Gemini and Binance USD as Collateral
Maker (MKR) holders have voted to prioritize adding Gemini USD, Binance USD, and several other tokens as collateral assets to the Maker DAO protocol so those tokens can be used to generate DAI stablecoins. As a result, Maker "Domain Teams"—elected community members—will analyze these tokens and determine whether or not the protocol can handle them before the community takes a final vote to accept or reject them as collateral assets.
Narrow Banking with Modern Depository Institutions: Is There a Reason to Panic?
What would be the effect of imposing a 100 percent reserve requirement to depository institutions? This paper contends that reserves do not compete with loans on the asset side of banks' balance sheets. Thus, they only affect liquidity provision by banks indirectly through their impact on the cost of loan and deposit creation. This cost could be driven to zero if, as the Eurosystem does, central banks remunerated required reserves at the same rate of their refinancing operations. The paper argues that the crucial constraint imposed by a fully backed banking system is collateral availability by depository institutions.
Government of Bermuda Pilots Stimulus Token in Response to COVID Crisis
The government of Bermuda has commenced a pilot of a digital stimulus token in partnership with local private payments platform Stablehouse, which is expected to provide initial feedback on the viability of digital tokens in facilitating the purchase of essential products and services. In 2019, Bermuda began developing a blockchain-based digital ID system and announced that the public could pay their taxes with USDC stablecoins. The development of the stimulus token kicked off later in the year as part of the government’s larger initiative to create a comprehensive crypto ecosystem on the island that supports the adoption of digital currencies. The pilot token is based on Blockstream’s Liquid blockchain protocol while the Greenwallet app will enable payments via a point-of-sale terminal provided by Stablehouse.
DeFi users turn to USDC stablecoin to earn high-yield interest
Members of the decentralized finance (DeFi) ecosystem are turning to USD Coin USDC in order to interact with DeFi protocols either by earning high-yield income on lending protocols like Compound and Aave. Users are also providing liquidity to liquidity pools like Uniswap and Curve, the latter of which offers stablecoin to stablecoin trading. Following the launch of Curve’s governance token, CRV, on August 14, there was a surge in USDC on-chain activity. The launch of the token has also helped Curve earn the third place in terms of value locked, following Aave and Compound, with $1.27 billion locked.
Ethereum Network Needs 'Drastic Increases in Scalability' to Tackle the Skyrocketing Fees: Vitalik
On September 1, the average transaction fees on the Ethereum network climbed to a new peak at above $10, and gas prices went past 450 Gwei. In response, Tether, the second biggest guzzler of gas, is planning to add support for ZK-Rollups. In this technique, many transactions are bundled into a single one, after integrating with OMG Network. This will reduce the pressure on the Ethereum network, which is congested amidst growing usage. Ethereum co-founder Vitalk Buterin has also been advising using layer2 solutions like OMG Network and Loopring.
The Turkish lira-backed stablecoin BiLira is now open for trading on cryptocurrency exchange Bittrex Global. Users can now use their ERC-20 BiLira tokens to buy Bitcoin (BTC) and USDT on Bittrex Global. There are currently 20 million BiLira tokens in supply. TRYB tokens are minted at the time of deposit, and an ID verification process takes place before the issuance. Users then redeem their tokens for fiat currency and transfer them on the network using the BiLira platform.
RealT Allows investors to directly buy shares of LLC managing properties and each RealT Token holder regularly earns their share of the property revenues directly into their wallet with stablecoins. On the Aave RealT market users will be allowed to deposit their tokens into the Aave Protocol and use them as collateral to borrow stablecoins. Intrinsically RealT assets collect stablecoins on a regular basis, and this can be leveraged in these loans as “income” that can contribute to the repayment of the loans organically, creating loans that at least partially repay themselves.
Maker seemingly gives up on Dai peg as interest rates are raised above 0%
MakerDAO (MKR) set interest rates on most assets, with the notable exclusion of Ether (ETH), back above 0%. Lowering interest rates is generally seen as a way of stimulating DAI creation, which is supposed to lower its price to its intended $1 peg, but DAI is trading at $1.03, significantly above its intended price. Maker has yet to find a satisfactory mechanism to entice arbitrageurs to bring the price down to $1. Several proposals based on strong-handed market interventions are being discussed, while external observers often bring up the idea of setting negative interest rates. The Maker community appears to be unwilling to cross that line for now, however.
