Circle Announces Support for USDC Stablecoin on Algorand Blockchain
The Algorand Foundation has announced that the USD Coin (USDC) stablecoin will be launched on the Algorand (ALGO) blockchain. The integration will allow customers using Circle APIs or Circle Business Accounts to convert funds from their bank account or card network into stable tokens on the Algorand blockchain.
Former U.S. CFTC Timothy Massad weighs in on Facebook's Libra 2.0.
Former U.S. CFTC Timothy Massad finds that Libra's 2nd white paper deals with many of the concerns previously raised. While Libra may not succeed in improving access to financial services for the underserved, he believes we should let it try. That is, we should create a reasonable regulatory framework under which the Libra proposal can be developed and implemented. The competition in payments will be a good thing, but regulators around the world need to work together to construct the proper framework for Libra. The financial regulatory challenge in the United States would be best addressed if Congress created a comprehensive framework for the regulation of payment systems, but that seems unlikely to happen in the short term. He belives that for many the potential benefits Libra might bring to our payment options outweigh the risks associated with an increase in Facebook’s power and its collection of data.
Telegram Agrees to Pay $18.5M Penalty in SEC Settlement Over Failed TON Offering
Telegram will pay $18.5 million and notify the U.S. Securities and Exchange Commission (SEC) if it plans to issue any sort of digital currency in the next three years in a proposed settlement with the securities regulator. The settlement ends a six-month court fight with the agency, and also indicates the messaging platform will be responsible for a $1.22 billion disgorgement that is offset by $1.19 billion paid as “termination amounts” in investors’ purchase agreements and the amounts that some investors loaned to Telegram earlier this year. Telegram has 30 days to pay the SEC penalty and up to four years to pay back investors under the settlement.
Celo Dollars: Powerful new digital money in circulation
Celo Dollars (cUSD) stablecoins are now live on the platform's mainnet, barely two months since the mainnet went live. The project has been making aggressive moves in both development and community growth. With cUSD now accessible, the foundation is optimistic that its vision of an all-inclusive financial ecosystem will be realized. Currently, the 75+ member Alliance's focus is on remittances and international aid.
Soramitsu Starts Testing ‘White Tiger’ Digital Currency in Japan
Japanese blockchain company Soramitsu will start testing a new "White Tiger" digital currency for retailers at the University of Aizu. It will run on the company’s native Hyperledger Iroha blockchain. Testing is starting with the university's cafeterias and shops before gradually being utilized at locations off campus. Soramitsu is one of the blockchain startups behind the development of Cambodia's blockchain-based Project Bakong retail payment system.
USD Coin (USDC) has broken the $1 billion market capitalization barrier. Multiple factors are driving recent growth, including COVID19-related currency volatility across many developing economies, the addition of support for blockchains other than Ethereum (with Algorand being the first to join) and the adoption of USDC by Compound (a decentralized finance (DeFi) lending crypto-asset lending platform. https://compound.finance/
FATF Report to the G20 Finance Ministers and Central Bank Governors on So-called Stablecoins
In a report to the G20 finance ministers and central bank governors, the Financial Action Task Force (FATF) said regulators need to cooperate to make measures such as the "travel rule" more effective. The organization will work to develop an international framework for authorities to coordinate and share information about virtual asset service providers (VASPs). The FATF also said it will be providing specific guidance on stablecoins for regulators at some future point.
Bitfinex Must Face N.Y. Suit Over $800 Million in Lost Funds
A New York state appeals court ruled that Bitfinex must face claims by New York state that it hid the loss of commingled client and corporate funds. Companies connected to Bitfinex are accused by the New York Attorney General of hiding the loss of more than $800 million in client and corporate funds. Companies tied to Bitfinex also operate the stablecoin Tether, which serves as a conduit for trading in much of cryptocurrency market globally. The appeals court rejected the argument that Tether, with a market capitalization of more than $9 billion, is not a security or commodity, and said the court has jurisdiction over its issuer.
CoinMetrics has produced an in-depth research report on the rise of stablecoins following the March 2020 crypto crash. Stablecoin supply has exploded in 2020 but it’s unclear exactly why. After it took 5 years for stablecoin supply to reach 6 billion, it only took another 4 months for it to grow from 6 billion to 12 billion following the March 12th crypto crash.
Hong Kong Citizens Turn to Stablecoins to Resist National Security Law
Trading volume between Hong Kong dollars and the U.S.-dollar pegged stablecoin USDT saw a surge in early June on the fiat-crypto trading platform TideBit. The surge followed the decision to strengthen Hong Kong’s national security law, which was unveiled by Chinese legislators during the Two Sessions, the largest annual political gathering in mainland China. The second trading surge on the exchange followed the enactment of the new law on June 30.
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.
