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A New Report From JPMorgan Shows Just How Big Tether Has Become
A New Report From JPMorgan Shows Just How Big Tether Has Become
Tether is now one of the biggest money market funds in the world, holding more commercial paper than companies like Amazon and Google. According to JP Morgan analysts, although Tether might prefer the simpler solution of holding their USDT reserves with US banks, they have been pushed into a corner because of their limited access to such banks caused by their reputation for shady behavior, including, in the past, misrepresenting the sufficiency and quality of those USDT reserves. The kind of big banks that could accommodate a material portion of these reserves, including JP Morgan themselves, would likely steer clear of Tether due to reputational risk concerns.
#Fintech#CryptoAssets#Stablecoins#Tether#DFC
·bloomberg.com·
A New Report From JPMorgan Shows Just How Big Tether Has Become
USDC Attestations Run Late, Raising Alarms in the Crypto Community
USDC Attestations Run Late, Raising Alarms in the Crypto Community
Centre is late in releasing its USDC reserves attestations, the last one posted on their website dating back to March when the stablecoin had a market cap of $11 billion. This fact and the sudden growth the crypto-asset experienced in the last few months (there are now almost $21 billion outstanding) is raising alarms about the delay of these documents (the March 31 report was published on May 24). There has not been a public disclosure of why the tardiness is happening, and the reports remain vague about how the reserves are invested: "held...at federally insured US depository institutions and in approved investments" with zero clarity as to what "approved investments" are.
#Fintech#CryptoAssets#Stablecoins#USDC#DFC
·news.bitcoin.com·
USDC Attestations Run Late, Raising Alarms in the Crypto Community
What's Going on with Circle's USDC Attestation Reports?
What's Going on with Circle's USDC Attestation Reports?
It has been previously reported that the publication of Circle's USDC stablecoin attestation reports have become very tardy. However, JP Koning also notes that between February and March 2021, the reports have gotten a bit less transparent. Circle no longer discloses the precise amount of U.S. dollars it holds in custody. Whereas they used to say "US Dollars held in custody =..." in March they started saying "US Dollars held in custody accounts are at least equal or greater than the USDC tokens outstanding..." One possibility is that Circle is investing in assets that cannot be easily valued, and going down the same slippery slope as Tether.
#Fintech#CryptoAssets#Stablecoins#Circle#USDC#Tether#DFC
·twitter.com·
What's Going on with Circle's USDC Attestation Reports?
Bitcoin’s Volatility Spawns New Crypto Balance Sheet Alternative
Bitcoin’s Volatility Spawns New Crypto Balance Sheet Alternative
Circle announced that it will be offering investors the opportunity to deposit USDC and earn as much as 7% annually through high-yield accounts with locked-in terms ranging from one month to a year. The interest is paid out in USDC, generated by Circle lending the digital dollars to a network of institutional investors that are willing to pay an interest rate for access to additional capital. The service will launch imminently in the U.S. and Switzerland. The Gemini exchange offers a similar scheme called "Gemini Earn" based on Gemini Dollars (GUSD) that promises returns of up to 7.4% annually.
#Fintech#CryptoAssets#Stablecoins#USDC#Gemini#Circle#DFC
·bloomberg.com·
Bitcoin’s Volatility Spawns New Crypto Balance Sheet Alternative
Stablecoins Like Tether Should Face Regulators' Scrutiny
Stablecoins Like Tether Should Face Regulators' Scrutiny
This is a great summary of the potential systemic risks around Tether by Timothy Massad, ex-Chairman of the US Commodity Futures Trading Commission. He calls for a strengthening of the regulation of crypto-assets generally and in particular stablecoins. He seems supportive of the Stablecoin Tethering and Bank Licensing Enforcement (STABLE) Act, introduced in Congress last December, that would require that stablecoins be issued by a bank and would impose certain standards.
#Fintech#CryptoAssets#Stablecoins#Tether#DFC
·bloomberg.com·
Stablecoins Like Tether Should Face Regulators' Scrutiny
Can a Cryptocurrency Break the Buck?
Can a Cryptocurrency Break the Buck?
This is a great summary of the potential systemic risks around Tether by Timothy Massad, ex-Chairman of the US Commodity Futures Trading Commission. He calls for a strengthening of the regulation of crypto-assets generally and in particular stablecoins. He seems supportive of the Stablecoin Tethering and Bank Licensing Enforcement (STABLE) Act, introduced in Congress last December, that would require that stablecoins be issued by a bank and would impose certain standards.
#Fintech#CryptoAssets#Stablecoins#Tether#DFC
·bloombergquint.com·
Can a Cryptocurrency Break the Buck?
Stability After the Crash
Stability After the Crash
According to Coinmetrics, none of the major stablecoins became seriously unpegged during the May 19 crypto flash crash. As prices drop, investors often rush to trade their crypto-assets into stablecoins, while the liquidations can cause stablecoins being used as collateral to be sold. This sudden shift in supply and demand can potentially knock stablecoin prices from their $1 peg, and threaten their stability. Although I and some others observed some USD stablecoins below 90 cents on some trading screens, apparently none actually traded there.
#Fintech#CryptoAssets#Stablecoins#FlashCrash#DFC
·coinmetrics.substack.com·
Stability After the Crash
Exposure to Tether scheme now reaches as far as NBA
Exposure to Tether scheme now reaches as far as NBA
Regulators have waited too long to act on so-called stablecoins, to the point where exposure to schemes like that being run using Tether has infected the entire digital asset industry—and even beyond it. This is thanks to a network of exchanges which surround and rely on Tether and who perform a vital role in Tether’s ability to mint new USDT and get them to market, all while maintaining a paper-thin illusion that the so-called stablecoins are backed by anything at all. In return, the exchanges get to sell the apparently value-less USDT in exchange for BTC."
#Fintech#CryptoAssets#Stablecoins#Tether#DFC
·coingeek.com·
Exposure to Tether scheme now reaches as far as NBA
How Big is Tether?
How Big is Tether?
"Tether is very nearly the same size as the 25th largest mutual fund or ETF. At their average rate of printing for 2021 it will take approximately 20 days until Tether would be larger than entities on this list."
#Fintech#CryptoAssets#Stablecoins#Tether#DFC
·bennetttomlin.medium.com·
How Big is Tether?
Crypto Accounting Is Changing – How Proof Of Reserves Could Improve Crypto Reporting
Crypto Accounting Is Changing – How Proof Of Reserves Could Improve Crypto Reporting
How can crypto custodians, crypto trading exchanges, and (ultimately) crypto banking institutions prove to external parties that reserves are indeed what they say they are? This is a pivotal question that continues to come to the surface, with a potential solution recently put forward; Proof of Reserves (PoR).
#Fintech#CryptoAssets#Stablecoins#Accounting#DFC
·forbes.com·
Crypto Accounting Is Changing – How Proof Of Reserves Could Improve Crypto Reporting
The Tether Scandal: The Biggest Threat To The Crypto-Ecosystem
The Tether Scandal: The Biggest Threat To The Crypto-Ecosystem
"This isn’t just a story about a tiny fraudulent company. As I’m writing this, Tether is now valued at nearly $63 billion, which would rank it amongst the largest financial crimes in history. It’s a ticking time bomb, and this article will provide a quality summary of why Tether is a systemic risk you shouldn’t overlook, or ignore."
#Fintech#CryptoAssets#Stablecoins#Tether#DFC
·cryptowhale.medium.com·
The Tether Scandal: The Biggest Threat To The Crypto-Ecosystem
Court Denies SEC's Request For Documents Relating To Ripple's Lobbying Efforts
Court Denies SEC's Request For Documents Relating To Ripple's Lobbying Efforts
Judge Sarah Netburn of the District Court of New York has denied the US Securities and Exchange Commission's (SEC's) request for documents related to Ripple's lobbying efforts, stating that Ripple's lobbying efforts are not relevant in the case. However, the Judge approved the SEC's request to extend the pre-trial discovery phase by two months, to have more time to respond to Ripple's earlier motion compelling the SEC to turn over the internal BTC, ETH, and XRP documents. In other words, if no settlement is reached soon, the case is likely to drag on to early 2022. The SEC launched its action against Ripple and two of its executives in December 2020, alleging that they raised over $1.3 billion through an unregistered, ongoing digital asset securities offering.
#Fintech#CryptoAssets#Stablecoins#Tether#DFC
·bitcoinexchangeguide.com·
Court Denies SEC's Request For Documents Relating To Ripple's Lobbying Efforts
Crypto's Weimar
Crypto's Weimar
A cryptocurrency has just re-enacted the Weimar hyperinflation. On June 17, 2021, the price of the cryptocurrency TITAN crashed to zero, and its related stablecoin IRON fell off its USD peg, trading as low as 69 cents to the dollar. It was a sudden and dramatic collapse that left investors shocked and bewildered. It was a speculative attack on the IRON stablecoin's peg, aided and abetted by panic selling (which was no doubt what the speculators hoped for).. And it succeeded, because the peg relied on a fundamentally flawed mechanism.
#Fintech#CryptoAssets#Stablecoins#DFC
·coppolacomment.com·
Crypto's Weimar
Is Tether a Black Swan?
Is Tether a Black Swan?
A Tether confidence crisis would likely result in a black swan event and a re-shuffling of the market. While there’s a chance that large players would counteract the crisis by buying back large amounts of USDT to restore the peg, or by successfully reassuring the market that all USDT can be redeemed at par, there’s no way to be sure that this will happen, unless you put a whole lot of trust in Tether and its affiliates.
#Fintech#CryptoAssets#Stablecoins#Tether#DFC
·muellerberndt.medium.com·
Is Tether a Black Swan?
Stablecoin inflows to exchanges dip as traders watch Bitcoin from the sidelines
Stablecoin inflows to exchanges dip as traders watch Bitcoin from the sidelines
USDT issuance has begun to stagnate while the circulating supply of USDC continues. There has also been an increase in USDC deposited onto exchanges while the amount of USDT has declined. This is significant because Tether printing has historically been the impetus for major market moves, but its continued legal challenges and questions regarding assets held in reserve have made holding the token more of a liability as regulators increasingly crackdown on the cryptocurrency market.
#Fintech#CryptoAssets#Stablecoins#Tether#Circle#DFC
·cointelegraph.com·
Stablecoin inflows to exchanges dip as traders watch Bitcoin from the sidelines
Stablecoins Risk a Rerun of Financial Crises Past
Stablecoins Risk a Rerun of Financial Crises Past
"Well-managed and properly regulated stablecoins may be useful for certain purposes and players, like those operating in the DeFi world. But stablecoins will never be as stable as dollars, physical or digital – and may even require a bailout when panic over broken promises spreads."
#Fintech#CryptoAssets#Stablecoins#DFC
·coindesk.com·
Stablecoins Risk a Rerun of Financial Crises Past
FDIC Requirements for "Pass-Through" Deposit Insurance in Brokered Deposit Programs
FDIC Requirements for "Pass-Through" Deposit Insurance in Brokered Deposit Programs
"This memorandum reviews this recent FDIC guidance, as well as related guidance from the Securities and Exchange Commission (“SEC”) concerning when a broker-dealer or other intermediary6 may have created a separate obligation to its customers that would be a “security” for purposes of the Securities Act of 1933 (“Securities Act”), rather than merely acting as a custodian for customer assets. In our view, failure to comply with the SEC’s guidance concerning the creation of a separate security would pose a significant threat to the availability of “pass-through” deposit insurance."
#Fintech#CryptoAssets#Stablecoins#FDIC#DFC
·sewkis.com·
FDIC Requirements for "Pass-Through" Deposit Insurance in Brokered Deposit Programs
Circle Isn't Winning the Stablecoin Transparency Race
Circle Isn't Winning the Stablecoin Transparency Race
JP Koning writes about USD Coin transparency, focusing on the nature of its "approved investments." "What are these investments? How many does it own? Circle, USDC's issuer, has never disclosed much information on them. Because Circle is regulated by 44 state licensing boards, and each board has its own permissible investment rules (some very lenient), it's very difficult to reverse-engineer what USDC's "approved investments" might be comprised of. Responding to an inquiry, Circle said that they own 'cash, cash equivalents and short-duration investment-grade assets.' This gives us a bit more of an idea about the nature of Circle's approved investments. But why not get even more transparent? It would be a big win for stablecoin consumers if Circle provided descriptions of its approved investments in subsequent attestation reports, and broke down what proportion of customers' funds are allocated to each bucket."
#Fintech#CryptoAssets#Stablecoins#USDC#DFC
·coindesk.com·
Circle Isn't Winning the Stablecoin Transparency Race
A Dynamic Model of Stablecoins and Crypto Shadow Banking
A Dynamic Model of Stablecoins and Crypto Shadow Banking
"We develop a dynamic model of stablecoins and crypto shadow banking, where the stablecoin issuer transforms risky assets, including cryptocurrencies, into digital tokens of stable values. Both the stablecoin issuer's reserve assets and users' collateral back the stablecoin. However, even under over-collateralization, a pledge of one-to-one convertibility to a reference currency can be fragile. The distribution of states is bimodal: A fixed exchange rate may persist, but once the stablecoin breaks the buck, the recovery is slow. When negative shocks drain the issuer's reserves, debasement allows the issuer to share risk with users, but it triggers a vicious cycle of depressed stablecoin demand, lower transaction volume and transaction fees, slow rebuild of reserves, and a persistent need for debasement. Stablecoin management requires the optimal combination of strategies commonly observed in practice, such as open market operations, dynamic requirement of users' collateral, transaction fees or subsidies, re-pegging, and issuances of ``secondary units'' that function as the stablecoin issuer's equity. Our model lends itself to an evaluation of regulatory proposals (e.g., capital requirement) and sheds light on the complex incentives behind the stablecoin initiatives led by the network companies (e.g., Facebook)."
#Fintech#CryptoAssets#Stablecoins#DFC
·papers.ssrn.com·
A Dynamic Model of Stablecoins and Crypto Shadow Banking
Taming Wildcat Stablecoins by Gary B. Gorton, Jeffery Zhang
Taming Wildcat Stablecoins by Gary B. Gorton, Jeffery Zhang
Based on lessons learned from history, Gary Gorton and the Fed's Jeffery Zhang argue that privately produced monies are not an effective medium of exchange because they are not always accepted at par and are subject to runs. They present proposals to address the systemic risks created by stablecoins, including regulating stablecoin issuers as banks and issuing a central bank digital currency.
#Fintech#CryptoAssets#Stablecoins#DFC
·papers.ssrn.com·
Taming Wildcat Stablecoins by Gary B. Gorton, Jeffery Zhang
Regulators Helped to Create the Stablecoin Boom
Regulators Helped to Create the Stablecoin Boom
"A major driver behind stablecoins’ popularity is their pseudonymity. Folks don’t have to provide ID to use them. By failing to close this pseudonymity loophole early on, regulators themselves have sponsored the “incredibly fast” growth that they are now so worried about. If they continue to ignore the pseudonymity issue, their job will get only more complicated."
#Fintech#CryptoAssets#Stablecoins#DFC
·coindesk.com·
Regulators Helped to Create the Stablecoin Boom
Janet Yellen: We Must 'Act Quickly' on Stablecoin Regulation
Janet Yellen: We Must 'Act Quickly' on Stablecoin Regulation
U.S. Treasury Secretary Janet Yellen convened the President’s Working Group on Financial Markets (PWG), joined by the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation, to discuss stablecoins. In the meeting, participants discussed the rapid growth of stablecoins, potential uses of stablecoins as a means of payment, and potential risks to end-users, the financial system, and national security. The Secretary underscored the need to act quickly to ensure there is an appropriate U.S. regulatory framework in place. The group also heard a presentation from Treasury staff on the preparation of a report on stablecoins, which would discuss their potential benefits and risks, the current U.S. regulatory framework, and the development of recommendations for addressing any regulatory gaps. The PWG expects to issue recommendations in the coming months.
#Fintech#CryptoAssets#Stablecoins#Regulation#DFC
·home.treasury.gov·
Janet Yellen: We Must 'Act Quickly' on Stablecoin Regulation
Circle Reveals Assets Backing USDC Stablecoin
Circle Reveals Assets Backing USDC Stablecoin

Circle published a breakdown of the assets backing its USDC stablecoin in its latest attestation report. According to the report, on May 28 bout 61% of its tokens were backed by cash and money market funds. Yankee certificates of deposit (i.e., issued by non-US banks) comprise a further 13%, short-term U.S. Treasury securities account for 12%, unsecured commercial paper accounts for 9%, and the remaining tokens are backed by unsecured short-term municipal and corporate bonds.

By "short-term" is meant a maximum term to maturity of three years, and the overall portfolio weighted average maturity is limited to 1.5 years. There are also credit rating limits based on S&P scales. The overall portfolio must main an average credit rating must of A or better, commercial paper holdings must be rated A1 on the short-term scale, and for bonds issued by corporations and financial institutions must be rated BBB+ or higher on the long-term scale.

#Fintech#CryptoAssets#Stablecoins#USDC#Circle#DFC
·coindesk.com·
Circle Reveals Assets Backing USDC Stablecoin
Bitcoin's gold rush was always an illusion
Bitcoin's gold rush was always an illusion
"Through successive booms and busts, the price of Bitcoin has been manipulated by a handful of large players, using fake transactions, imaginary assets and sophisticated timing. In doing so they created real demand, as celebrities and financial institutions responded to the attention and encouraged millions of people to gamble money on a product they barely understood, in the hope that it would make them rich."
#Fintech#CryptoAssets#Stablecoins#Bitcoin#Tether#DFC
·newstatesman.com·
Bitcoin's gold rush was always an illusion
A Regulated Stablecoin Means Having a Regulator
A Regulated Stablecoin Means Having a Regulator
"Neither USDC nor Tether is a regulated digital asset, for the simple reason that neither token has a regulator. In fact, neither USDC nor Tether tokens are “stablecoins” in anything other than name. These tokens are backed by illiquid and risky debt obligations – a critical weakness that no prudential regulator would allow to exist as this creates undue risk for their customers."
#Fintech#CryptoAssets#Stablecoins#Tether#USDC#Paxos#Gemini#Regulation#DFC
·paxos.com·
A Regulated Stablecoin Means Having a Regulator
Paxos lawyer: Tether and USDC not ‘real stablecoins’
Paxos lawyer: Tether and USDC not ‘real stablecoins’
Paxos Trust lawyer and chief compliance officer Dan Burstein claims that Tether's USDT and Circle's USDC are unregulated "stablecoins" in name only. Paxo-issued Paxos Standard (PAX) and Binance Dollar (BUSD) are approved and regulated by the New York State Department of Financial Services (NYDFS). That means each token is backed by reserves in the safest instruments, such as bank deposits insured by the US Federal Deposit Insurance Corporation or short-term maturity US Treasuries. Gemini Dollars (GUSD) issued by Gemini Trust Company, are similarly NYDFS regulated
#Fintech#CryptoAssets#Stablecoins#Tether#USDC#Gemini#Binance#DFC
·msn.com·
Paxos lawyer: Tether and USDC not ‘real stablecoins’
Tether Executives Said to Face Criminal Probe Into Bank Fraud - Bloomberg
Tether Executives Said to Face Criminal Probe Into Bank Fraud - Bloomberg
A U.S. Department of Justice (DoJ) probe into Tether is homing in on whether executives behind the USDT stablecoin committed bank fraud, a potential criminal case that would have broad implications for the crypto-asset market. The DoJ is scrutinizing whether Tether concealed from banks that transactions were linked to crypto-assets.
#Fintech#CryptoAssets#Stablecoins#Tether#DFC
·bloomberg.com·
Tether Executives Said to Face Criminal Probe Into Bank Fraud - Bloomberg