DFC

Celo, a decentralized financial app, is adding a new stablecoin, backed by the Euro. The Euro stablecoin will be backed by a basket of cryptocurrencies that are algorithmically adjusted to maintain a stable price. The Celo Euro is the second stablecoin to launch on the platform after the Celo Dollar (cUSD), launched in June 2020.

Brixton Pound (B£), a local currency used in the Brixton district of London, has selected the Algorand blockchain platform to launch the blockchain-version of the "complementary" currency. B£ is only accepted by merchants the Brixton area of London and the exchange rate to the British pound sterling (GBP) is always 1:1.

Tether (USDT) transactions on the Tron network have outpaced the number of USDT transfers on the Ethereum blockchain. Despite a lot more ERC20-based USDT in the wild, USDT transaction counts using the TRC20 standard have been much higher all year long, likely due to rising ETH network fees. Fees on the Tron network are near zero, whereas ETH transaction fees can exceed $5 range. However, the aggregated dollar volumes of ERC20 USDT is still 2x higher than those using TRC20. USDT is also issued on Ethereum, Tron, Bitcoin Cash, EOS, Liquid, Solana, and Algorand, among others.

"The word "stablecoin" can be used as a logical description for “a cryptocurrency designed to have low price volatility” and has “stores of value or units of account,” or “a new type of cryptocurrency that often have their value pegged to another asset… designed to tackle the inherent volatility seen in cryptocurrency prices,” or a currency that can “act as a medium of monetary exchange and a mode of storage of monetary value, and its value should remain relatively stable over longer time horizons.”"

"Circle APIs offer major payment rails like cards, wires and blockchain transfers — offering multiple ways for users to transfer money and transact with USDC, the world’s fastest growing dollar stablecoin. Today, Circle is adding ACH as a payment rail, with comprehensive support available across both Payments and Payouts products. Customers can enable their users to make and receive payments using ACH, with seamless conversions into and out of USDC."

On January 4, 2021, the Chief Counsel of the Office of the Comptroller of the Currency ("OCC") issued an interpretive letter ("IL 1174") on the permissibility of national banks to use independent node verification networks ("INVN") and stablecoins for payment activities. In particular, "[n]ational banks … may use new technologies, including … stablecoins, to perform bank permissible activities, such as payment activities." The letter, when coupled with other OCC interpretations, now firmly places the issuance and use of stablecoins as permissible bank activities. While stablecoins may also be securities under certain circumstances, there is a well-defined line of case law, including from the Supreme Court, about the factors to apply when determining whether a product that has characteristics of both a banking product and a security is one or the other (or both). Therefore, issuers and investors may now apply the age-old factors to bank-issued stablecoins and be comfortable about the regulatory characterization of the ultimate product.

The testnet for Diem reached over 50 million transactions on January 27, data from blockchain explorer inDiem shows. It operates at an average throughput of over 3 transactions per second (tps). While sounding fast, this is much slower than transactions on both Bitcoin (4.6 tps) and Ethereum (15 tps), and much slower to the speeds on upcoming networks like Solana (65,000 tps). In terms of testnet users, over 221,000 individual addresses have interacted with Diem in some capacity.

Diem is offering a pre-sale discount for early investors at projectdiem.io. Anyone "can participate in the birth of diem and be one of the first buyers. Buy diem coins now with cryptocurrencies like bitcoin, ethereum, and bitcoin cash.”

We do not intend to defend Tether, iFinex, Bitfinex or any other private organization related to tether, we have not spoken to them and they can and do speak for themselves. Rather, we are here to debunk the faulty information in “The Bit Short,” as well as to provide some context so that new investors can avoid the obvious misconceptions that fuel this and many other poorly-researched FUD articles that will continue to propagate.

USDC has gone live on the Stellar network. At launch, Stellar USDC is immediately available on Stellar's decentralized exchange, accessible to any Stellar account through integrated wallets (Lobstr, Solar, StellarPort, StellarX, and StellarTerm), and tradeable across Stellar's ecosystem of more than 9,000 assets including stablecoins like NGNT, BRLT, ARST, EURT, TZS and ZAR.

It could be that Tether doesn't have solid enough finances to do any of the things I've listed. Or maybe it does, but it doesn't actually care about rumours. After all, even after years of criticism, Tether continues to grow and dominate the stablecoin sector. The community of stablecoin users seem quite content to rely on everyone's using it. For now, at least.

Bitfinex has repaid its sister company Tether the remaining loan balance of $550 million. In 2018, Tether opened a credit line worth $900 million for Bitfinex, of which $750 million was used by the exchange. Bitfinex repaid $100 million each in 2019 and 2020. That loan is at the heart of an ongoing legal dispute with New York’s Attorney General.

Local currencies can help restore balance in society and it’s time to move away from an economy based on the exploitation of individuals’ personal data. So says Diana Finch, managing director of Bristol Pound and our interviewee in the latest New Money Review podcast. The Bristol Pound is a local currency project born in the aftermath of the 2008 financial crisis. It first appeared in 2012 and quickly grew to become the UK’s largest scheme of its type.

It’s probably too early to tell, but algorithmic stablecoin efforts to create stability without collateral seem ambitious and prone to breakage. The evidence that Empty Set Dollar and Dynamic Set Dollar have provided over the last few months suggests they are too ambitious. An algorithmic stablecoin only works so long as its users’ self-referential beliefs persist.

Celo, the open-source blockchain payments outfit taking on the Facebook-led Diem, has received $20 million in backing from Andreessen Horowitz, Greenfield One, and Electric Capital.

Nouriel Roubini thinks Tether is issuing fake money. And that nothing short of an audit will prove the $30 billion in USDT the BVI-registered company has spewed out into the crypto markets thus far are even 74% backed. Tether is a “criminal enterprise,” he bluntly told reporters on Coindesk TV. In a 10-minute interview, Roubini predicted Tether’s looming demise, called for the SEC to look into Elon Musk’s bitcoin tweets, and claimed that central bank digital currencies will spell the end for crypto.

Crypto custodian Fireblocks and payments platform First Digital Assets Group are providing connectivity and support to Diem, the global stablecoin and payments system formerly known as Libra. They will provide the digital plumbing to allow financial service providers such as banks, exchanges, payment service providers (PSPs) and eWallets to plug into Diem on day one. Diem plans to emerge around the end of this quarter, with a modest minimum viable project based around a U.S. dollar stablecoin.

Amid much fanfare, many algorithmic stablecoins have not been stable. Is the problem intractable, or it's the just the algorithms that aren't good enough?

Stablecoins are a venerable and well-respected part of the history of US banking! Previously, the issuers were called “wildcat banks,” and the tokens were pieces of paper. The wildcat banking era, more politely called the “free banking era,” ran from 1837 to 1863. Banks at this time were free of federal regulation — they could launch just under state regulation. Under the gold standard in operation at the time, these state banks could issue notes, backed by specie — gold or silver — held in reserve. The quality of these reserves could be a matter of some dispute. The wildcat banks didn’t work out so well. The National Bank Act was passed in 1863, establishing the United States National Banking System and the Office of the Comptroller of the Currency — and taking away the power of state banks to issue paper notes.

The New York Attorney General’s office has reached a settlement with the assorted iFinex companies in the investigation they’ve been conducting since late 2018. This is absolutely as good a deal as iFinex could have hoped for — a wrist-slap, with some strong leashes attached. Tether now has three months to present a winning story on their reserves.

Canadian digital bank VersaBank plans to launch a Canadian dollar-pegged stablecoin. VCAD will be issued by VersaBank to financial intermediary partners in exchange for Canadian dollar deposits. The partners will then offer VCAD directly to individuals and businesses for use in commerce. VCAD will be redeemable for Canadian dollars as required.

"There’s supposedly a hacked document dump — which I don’t have a copy of — from Deltec Bank, including account details and emails relating to Tether and Bitfinex. Someone has been posting bits of it to Twitter."

Hackers have threatened to release sensitive company documents supposedly belonging to USDT stablecoin issuer Tether unless the firm sends a 500 Bitcoin (BTC) ransom to a specified address. Hackers purportedly threatened to leak documents that would “harm the Bitcoin ecosystem” if their ransom demands are not met. Tether has already stated that it will not pay the ransom.

Tether's poor stewardship of customer funds means that it is inexorably being replaced by safer stablecoins. Gresham's law, the adage that bad money pushes out good money, does not apply. The good is slowly pushing out the bad.

Against its wishes, Tether is now a New York-regulated financial firm. It will grudgingly have to make its financials public. Assuming they like what they see come reporting time, Tether skeptics may start to rethink their distaste. DeFi protocols like Maker and Compound may even lighten their tether penalties, thus gobbling up more tether. And who knows, maybe Tether will, after a taste of oversight, try to come in from the cold and apply for a money transmitter license like everyone else. Whether it will qualify is another matter. But stranger things have happened.

Vitalik Buterin argued that, like Ethereum, Bitcoin has its own potential bombs waiting to explode. The ecosystem around Ethereum could see failures and hacks, discussed the participants of The Tim Ferriss Show yesterday. To this, Buterin said: “I think the Bitcoin ecosystem does have its own […] ticking time bomb demons too, like Tether is one example.” He did not elaborate on this any further."