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Canadian Crypto Trading Platforms Face 'Enhanced' Rules Under New Regulations
Canadian Crypto Trading Platforms Face 'Enhanced' Rules Under New Regulations
The Canadian Securities Administrators (CSA) published new guidance for the local crypto-asset industry, warning crypto-asset trading platforms (CTPs) that they would have to abide by "enhanced investor protection commitments. These include "enhanced expectations" regarding the custody and segregation of crypto-assets held on behalf of Canadian clients and a prohibition on offering margin, credit, or other forms of leverage to any Canadian client. They will also prohibit CTPs from permitting clients to purchase or deposit stablecoins and proprietary tokens without the prior written consent of the CSA. https://www.securities-administrators.ca/news/canadian-securities-regulators-strengthen-oversight-enhance-expectations-of-crypto-asset-trading-platforms-operating-in-canada/?utm_source=pocket_saves
#Fintech#CryptoAssets#Regulation#Custody#Stablecoins#Canada#DFC
·coindesk.com·
Canadian Crypto Trading Platforms Face 'Enhanced' Rules Under New Regulations
The Future of Machine Money
The Future of Machine Money
The Digital Euro Association (DEA) published a paper on the the potential of stablecoins in the European internet-of-things (IoT) and machine-to-machine (M2M) economies. The paper examines the benefits and drawbacks of M2M payments, provides industry use cases that highlight the potential benefits of stablecoin-enabled IoT and M2M payments, and discusses the need for further guidance from regulators to spur M2M payment growth.
#Fintech#CryptoAssets#Stablecoins#IoT#DEA#DFC
·home.digital-euro-association.de·
The Future of Machine Money
Tether's Banking Problems
Tether's Banking Problems
"In principle Tether has a very good and easy business, but in practice it is weirdly difficult, and issuing USDT in exchange for Bitcoin collateral might in fact be easier and safer than issuing USDT in exchange for dollars in the bank. To get dollars in the bank, you need a bank."
#Fintech#CryptoAssets#Stablecoins#Tether#USDT#DFC
·bloomberg.com·
Tether's Banking Problems
USDC depegs as Circle confirms $3.3B stuck with Silicon Valley Bank
USDC depegs as Circle confirms $3.3B stuck with Silicon Valley Bank
Circle’s USDC stablecoin, the second-largest stablecoin at $42 billion of market cap, depegged from the USD, trading as low as $0.88 on Coinbase this morning (March 11, 2023). This followed Circle's announcement that $3.3 billion of USDC's reserves were held at Silicon Valley Bank (SVB) which was shut down yesterday by the California Department of Financial Protection and Innovation and taken over by the Federal Deposit Insurance Corporation (FDIC). Also, Coinbase announced that USDC redemptions would be temporarily suspended.
#Fintech#CryptoAssets#Stablecoins#Circle#USDC#DFC
·cointelegraph.com·
USDC depegs as Circle confirms $3.3B stuck with Silicon Valley Bank
Startup Bank Had a Startup Bank Run
Startup Bank Had a Startup Bank Run
"The lesson might be that there are some industries that are bad to bank. Imagine that it was 2021, and someone was like “do you want to start the Bank of Crypto? What about the Bank of Venture-Backed Tech Startups?” You’d be tempted, right? Those industries had so much money! They seemed cool. If you were their bank — if you were the specialized bank that exclusively focused on those industries — influencers on Twitter would tweet nice things about you, and you’d get invited to fancy parties. Also, as their bank, you’d probably find a way to get a cut of growing industries with lots of potential. Provide banking services to tech startups, get warrants in those startups, get rich when they go public. Provide banking services to crypto exchanges, start some sort of blockchain-based payment network, get rich through the magic of saying “blockchain” a lot. "
#Fintech#CryptoAssets#Stablecoins#Circle#USDC#DFC
·bloomberg.com·
Startup Bank Had a Startup Bank Run
Circle To ‘Stand Behind’ USDC, Cover $3.3 Billion Shortfall Held in Silicon Valley Bank
Circle To ‘Stand Behind’ USDC, Cover $3.3 Billion Shortfall Held in Silicon Valley Bank
USDC stablecoin issuer Circle announced that it will “cover any shortfall” caused as a result of the $3.3 billion in its funds held by the collapsed Silicon Valley Bank (SVB). Circle said it is legally obliged to “stand behind” USDC and will cover any shortfall using corporate resources—and external capital if necessary. USDC is currently collateralized 77% ($32.4 billion) with short-term U.S. Treasury Bills and 23% ($9.7 billion) with commercial bank deposits ($5.4 billion with BNY Mellon, $3.3 billion at SVB, and $1 billion at Consumer Bank). Circle also maintains USDC transaction and settlement accounts with Signature Bank.
#Fintech#CryptoAssets#Stablecoins#Circle#USDC#DFC
·decrypt.co·
Circle To ‘Stand Behind’ USDC, Cover $3.3 Billion Shortfall Held in Silicon Valley Bank
Remarks by FDIC Chairman Martin Gruenberg relevant to SVB's collapse
Remarks by FDIC Chairman Martin Gruenberg relevant to SVB's collapse
"The current interest rate environment has had dramatic effects on the profitability and risk profile of banks’ funding and investment strategies. First, as a result of the higher interest rates, longer term maturity assets acquired by banks when interest rates were lower are now worth less than their face values. The result is that most banks have some amount of unrealized losses on securities. The total of these unrealized losses, including securities that are available for sale or held to maturity, was about $620 billion at yearend 2022. Unrealized losses on securities have meaningfully reduced the reported equity capital of the banking industry. The good news about this issue is that banks are generally in a strong financial condition, and have not been forced to realize losses by selling depreciated securities. On the other hand, unrealized losses weaken a bank’s future ability to meet unexpected liquidity needs. That is because the securities will generate less cash when sold than was originally anticipated, and because the sale often causes a reduction of regulatory capital."
#Fintech#CryptoAssets#Stablecoins#Circle#USDC#DFC
·fdic.gov·
Remarks by FDIC Chairman Martin Gruenberg relevant to SVB's collapse
FDIC Takeover of Silicon Valley Bank: Assessing the Impact on Stablecoins
FDIC Takeover of Silicon Valley Bank: Assessing the Impact on Stablecoins
"The events of the last few days highlight the risks posed by excessive reliance on centralized infrastructure, and will be certain to inform future decisions. But despite a quickly-evolving regulatory environment in the U.S., some of the basic primitives granted by digital bearer assets such as bitcoin—that they are trivially self-custodied, disintermediated, and provide on-chain transparency—are more acute than ever, echoing a sentiment which sparked a pseudo-anonymous Satoshi Nakamoto to release a new project to the world amid the Great Financial Crisis in October of 2008."
#Fintech#CryptoAssets#Circle#USDC#Silvergate#Stablecoins#DFC
·coinmetrics.substack.com·
FDIC Takeover of Silicon Valley Bank: Assessing the Impact on Stablecoins
FDIC Takeover of Silicon Valley Bank: Assessing the Impact on Stablecoins
FDIC Takeover of Silicon Valley Bank: Assessing the Impact on Stablecoins
"The events of the last few days highlight the risks posed by excessive reliance on centralized infrastructure, and will be certain to inform future decisions. But despite a quickly-evolving regulatory environment in the U.S., some of the basic primitives granted by digital bearer assets such as bitcoin—that they are trivially self-custodied, disintermediated, and provide on-chain transparency—are more acute than ever, echoing a sentiment which sparked a pseudo-anonymous Satoshi Nakamoto to release a new project to the world amid the Great Financial Crisis in October of 2008."
#Fintech#CryptoAssets#Circle#USDC#Silvergate#Stablecoins#DFC
·coinmetrics.substack.com·
FDIC Takeover of Silicon Valley Bank: Assessing the Impact on Stablecoins
NAB completes world-first with cross-border stablecoin transaction
NAB completes world-first with cross-border stablecoin transaction
Australia's NAB has completed an intra-bank cross-border transaction using NAB-issued stablecoin on the public and permissionless Ethereum blockchain, involving deployment of stablecoin smart contracts for seven major global currencies. NAB’s AUDN stablecoin will be fully backed one-for-one with Australian dollars and managed as a liability of the bank, will be the cornerstone for NAB’s ambitions in digital assets. NAB claims this is the world’s first use case of a large financial institution leveraging a public blockchain for cross-border payment rails.
#Fintech#CryptoAssets#Stablecoins#Australia#CrossBorder#Payments#DFC
·news.nab.com.au·
NAB completes world-first with cross-border stablecoin transaction
SVB Took the Wrong Risks
SVB Took the Wrong Risks
"Yes! I think that post (“Why is finance so complex?”) from Steve Randy Waldman at Interfluidity is a classic, I cite it often, and it was what I had in mind as I was writing yesterday. Waldman describes banking as, broadly speaking, an opacity mechanism for credit, a way for society to take a lot of credit risk without the people taking that risk quite knowing that that’s what they’re doing. My point yesterday was that it is also an opacity mechanism for interest rates, a way for society to borrow short and lend long. Sometimes you need to bulk up the opacity though."
#Fintech#CryptoAssets#Stablecoins#Circle#USDC#DFC
·bloomberg.com·
SVB Took the Wrong Risks
Monetary Tightening and U.S. Bank Fragility in 2023: Mark-to-Market Losses and Uninsured Depositor Runs
Monetary Tightening and U.S. Bank Fragility in 2023: Mark-to-Market Losses and Uninsured Depositor Runs
"We analyze U.S. banks’ asset exposure to a recent rise in the interest rates with implications for financial stability. The U.S. banking system’s market value of assets is $2 trillion lower than suggested by their book value of assets accounting for loan portfolios held to maturity. Marked-to-market bank assets have declined by an average of 10% across all the banks, with the bottom 5th percentile experiencing a decline of 20%. We illustrate that uninsured leverage (i.e., Uninsured Debt/Assets) is the key to understanding whether these losses would lead to some banks in the U.S. becoming insolvent-- unlike insured depositors, uninsured depositors stand to lose a part of their deposits if the bank fails, potentially giving them incentives to run. "
#Fintech#CryptoAssets#Stablecoins#Circle#USDC#SiliconValleyBank#DFC
·papers.ssrn.com·
Monetary Tightening and U.S. Bank Fragility in 2023: Mark-to-Market Losses and Uninsured Depositor Runs
In Ukraine, Crypto Finds a Purpose
In Ukraine, Crypto Finds a Purpose
The United Nations High Commission for Refugees (UNHCR), the Stellar Development Foundation, USDC stablecoin issuer Circle, and cross-border money transfer company MoneyGram have rigged up a system for sending aid directly to Ukrainian refugees using crypto-assets. The UNHCR delivers USDC hosted on the Stellar network, to a digital wallet that can be accessed via smartphone, even to people without bank accounts. The recipient then exchanges their USDC for local currency at any MoneyGram facility. Because the USDC is hosted on decentralized infrastructure and in the custody of individual wallet owners, funds cannot be withheld.
#Fintech#CryptoAssets#Circle#MoneyGram#USDC#Stablecoins#CrossBorder#Payments#DFC
·wired.com·
In Ukraine, Crypto Finds a Purpose
Macroprudential Considerations for Tokenized Cash
Macroprudential Considerations for Tokenized Cash
"This paper examines the financial stability risks associated with tokenized cash, a subset of stablecoins fully reserved with cash and cash equivalents. Using a combination of on-chain data together with uniquely collected wallet address labels, we construct empirical measures of liquidity ratios and run off rates on the largest cash token and characterize its users and their behavior. The overall circulation of tokenized cash is largely insulated from crypto price movements, though price changes correlate with re-balancing between smart contracts and private wallets. A liquidity ratio calculation, similar in concept to Liquidity Coverage Ratio (LCR), indicates that tokenized cash has at least two times the amount of High-Quality Liquid Assets (HQLA) when compared to the worst observed gross outflow over 30-day ahead periods. We discuss the implications of tokenized cash on safe asset creation, credit supply, and monetary policy transmission. The adoption of tokenized cash can reduce moral hazard risks from public guarantees and expand credit provision through market-based lending enabled by smart contracts. "
#Fintech#CryptoAssets#Stablecoins#MacroPru#DFC
·papers.ssrn.com·
Macroprudential Considerations for Tokenized Cash
Circle's Payment Stablecoin Policy Principles
Circle's Payment Stablecoin Policy Principles
"The following policy principles reflect Circle’s real-world experience operating the world’s leading regulated dollar digital currency, USD Coin (USDC), which stands at more than $54 billion in circulation. USDC has safely powered more than $5 trillion in on-chain transactions and is available through a global network of thousands of digital wallets, exchanges and other products and services in more than 190 countries, lowering the fundamental cost of payments and financial services and establishing dollar payments utility as a native feature of the internet.
#Fintech#CryptoAssets#Stablecoins#Circle#USDC#DFC
·circle.com·
Circle's Payment Stablecoin Policy Principles
CSA Staff Notice 21-332 Crypto Asset Trading Platforms
CSA Staff Notice 21-332 Crypto Asset Trading Platforms
from the Ontario Securities Commission: "We would not expect to provide consent in respect of a VRCA (stablecoin) that is not fully-backed by an appropriate reserve but rather maintains its value through an algorithm. Also, a CTP providing a PRU, or a registered CTP, may not be able to satisfy their PRU commitments or regulatory obligations in respect of VRCAs that maintain their value through an algorithm, including know-your product, account appropriateness or other PRU commitments or regulatory obligations to clients."
#Fintech#CryptoAssets#Stablecoins#Regulation#Canada#DFC
·osc.ca·
CSA Staff Notice 21-332 Crypto Asset Trading Platforms
Fed explains why Custodia got an 'F' on its examination
Fed explains why Custodia got an 'F' on its examination
The Fed’s Board of Governors released its final order on crypto-centric, Wyoming-based Custodia Bank’s application to become a member of the Federal Reserve system. The central bank raised strong doubts about Custodia’s management team, financial condition and business model in rejecting the application. https://www.federalreserve.gov/newsevents/pressreleases/files/orders20230324a1.pdf
#Fintech#CryptoAssets#Stablecoins#Regulation#UnitedStates#Custodia#DFC
·theblock.co·
Fed explains why Custodia got an 'F' on its examination
Wyoming to issue stable tokens
Wyoming to issue stable tokens
Wyoming's governor has signed SF 127 enacting the Wyoming Stable Token Act, creating the Wyoming stable token commission, and authorizing the issuance of stable tokens in the state. Under the Act, a Wyoming stable token is “a virtual currency representative of and redeemable for one United States dollar held in trust by the state of Wyoming” that may only be issued in exchange for a USD. The Act also outlines criteria relating to liability limitations and requires that the commission issue at least one Wyoming stable token no later than December 31, 2023.
#Fintech#CryptoAssets#Stablecoins#Wyoming#DFC
·jdsupra.com·
Wyoming to issue stable tokens
USDC Boasted Transparency. It Didn't Help When Silicon Valley Bank Got Into Trouble
USDC Boasted Transparency. It Didn't Help When Silicon Valley Bank Got Into Trouble
"Had Circle been as opaque as its competitors, no one would have known that Silicon Valley Bank was its banker and the weekend run on USDC probably would never have occurred. The lesson would seem to be: Don't be transparent or, if you need to be transparent, don't be transparent about your shortcomings."
#Fintech#CryptoAssets#Stablecoins#Circle#USDC#SiliconValleyBank#DFC
·coindesk.com·
USDC Boasted Transparency. It Didn't Help When Silicon Valley Bank Got Into Trouble
Payment versus trading stablecoins
Payment versus trading stablecoins
An article by Circle Chief Economist Gordon Liao distinguishes stablecoins’ use in trading versus payment activities and their impact on financial stability. Payment stablecoins like Circle's USDC have lower speculation exposure than trading stablecoins like Tether's USDT, MakerDAO's DAI, and Binance's BUSD. Two measures are presented as evidence; the total crypto trading volume facilitated by the stablecoin in question versus the amount of it in circulation, and the correlation between the change in stablecoin circulation and crypto-asset returns. Dai shows the highest correlation with crypto-asset returns because it is collateralized with crypto-assets, so a decrease in the asset collateral’s value can prompt the forced redemption of the stablecoin.
#Fintech#CryptoAssets#Stablecoins#Circle#USDC#Tether#Binance#BUSD#MakerDAO#DAI#DFC
·cepr.org·
Payment versus trading stablecoins
So much for Wyoming blockchain regulatory capture — the Fed blocks Custodia Bank
So much for Wyoming blockchain regulatory capture — the Fed blocks Custodia Bank
Caitlin Long had high hopes of bringing crypto into the mainstream financial system. Long’s Custodia Bank in Cheyenne, Wyoming, a state-charted special purpose depository institution, or SPDI, was spearheading those dreams for all of cryptocurrency. Those dreams crashed into the concrete bollard of reality on January 27, 2023, when the Federal Reserve Board denied Custodia’s application to be a Federal Reserve member bank, and the Federal Reserve Bank of Kansas City denied its application for a master account. The Board’s full 86-page order, made public on March 25, details how Custodia failed to address “the heightened risks associated with crypto activities, including its ability to mitigate money laundering and terrorism financing risks.” (The Kansas City Fed’s denial letter was not made public.)
#Fintech#CryptoAssets#Stablecoins#Custodia#Regulation#UnitedStates#DFC
·davidgerard.co.uk·
So much for Wyoming blockchain regulatory capture — the Fed blocks Custodia Bank
Ex-Gemini Officials to Offer 5% on Treasuries-Backed Tokens to Bridge DeFi Gap
Ex-Gemini Officials to Offer 5% on Treasuries-Backed Tokens to Bridge DeFi Gap
"Former senior officials at digital-asset exchange Gemini are rolling out a token backed by US Treasury Bills with around 5% yield in response to a gulf in returns between traditional finance and decentralized crypto lending. OpenEden, a DeFi platform, is offering the token known as TBILL against stablecoins, which will in turn be invested in short-term US Treasury Bills."
#Fintech#CryptoAssets#Stablecoins#Tokenization#DFC
·bloomberg.com·
Ex-Gemini Officials to Offer 5% on Treasuries-Backed Tokens to Bridge DeFi Gap
Stablecoins versus tokenised deposits: implications for the singleness of money
Stablecoins versus tokenised deposits: implications for the singleness of money
The Bank for International Settlements (BIS) published a paper that compares the key characteristics of stablecoins ("private tokenized monies that circulate as bearer instruments") and tokenized commercial bank deposits. It claims that stablecoins violate the "singleness of money" principle because their relative exchange values can and do depart from parity. The problem could be solved by the introduction of clearing houses to support par exchange for the stablecoins issued by its members. However, according to the paper, this is a step backwards because the problem has already been solved by the existing two-tier monetary system. Also, tokenized deposit functionality can be expanded to allow for programmable ledgers, contingent execution and composability of transactions.
#Fintech#CryptoAssets#Stablecoins#Tokenization#BIS#DFC
·bis.org·
Stablecoins versus tokenised deposits: implications for the singleness of money
Payments stablecoins vs trading stablecoins
Payments stablecoins vs trading stablecoins
"Circle's Gordon Liao recently sketched out a new distinction between 'payment stablecoins' and 'trading stablecoins,' and then places Circle's stablecoin, USD Coin, in the former category, while confining competitors Tether, Dai, and Binance USD to the trading bucket. For the time being, I think that a payments stablecoin is a fable. Everyone wants to be in that category, but an actual payments stablecoin, one who's main use-case is remittances and POS payments, doesn't exist. Stablecoins remain primarily used for trading, gambling, and speculation."
#Fintech#CryptoAssets#Stablecoins#Tether#Circle#USDT#USDC#DFC
·jpkoning.blogspot.com·
Payments stablecoins vs trading stablecoins
Tether's market share grows to 61%, a two-year high
Tether's market share grows to 61%, a two-year high
Tether's USDT opened the year at a market cap of $66.2 billion, but has grown 22% to $81 billion. Circle's USDC has moved the opposite way, losing 21% of its market cap. USDT’s share of the stablecoin space is up to 61.5%, its highest mark in two years. The collapse of TerraUSD in May 2022 and shutdown of BinanceUSD (BUSD) in February have increased concentration in the stablecoin market. USDC is struggling amid regulatory concerns in the United States and fallout from banking chaos, when Circle revealed it had 8.25% of its USDC reserves in Silicon Valley Bank. Meanwhile, concerns persist exist around USDT over its underlying reserves.
#Fintech#CryptoAssets#Stablecoins#Tether#Circle#USDT#USDC#DFC
·coinjournal.net·
Tether's market share grows to 61%, a two-year high
SocGen subsidiary is first systemic bank to issue stablecoin on public blockchain
SocGen subsidiary is first systemic bank to issue stablecoin on public blockchain
Societe Generale subsidiary SocGen Forge unveiled the EUR-pegged EURCV stablecoin (EUR CoinVertible), which is initially being issued on the Ethereum public blockchain with plans for other blockchains as well. This is the first public blockchain stablecoin issued by a subsidiary of a global systemically important bank (G-SIB). Access to the fully-backed stablecoin is restricted to investors that have been through SocGen KYC and AML procedures. The motivation for the issuance includes using it as a robust settlement asset for on-chain transactions, corporate treasury, on-chain liquidity funding and an asset for margin calls.
#Fintech#CryptoAssets#Stablecoins#DFC
·ledgerinsights.com·
SocGen subsidiary is first systemic bank to issue stablecoin on public blockchain
Circle’s Hope for Access to NY Fed’s RRP Could Be Squashed by Policy Change
Circle’s Hope for Access to NY Fed’s RRP Could Be Squashed by Policy Change
The Federal Reserve Bank of New York (NY Fed) has curbed its counterparty criteria for its reverse-repurchase program (RRP) in a way that could prevent stablecoin issuer Circle from accessing the Fed facility. Funds “organized for a single beneficial owner,” registered as “2a-7 funds” at the Securities and Exchange Commission (SEC), “generally will be deemed ineligible” under the new rules. The Circle Reserve Fund, managed by global investment management giant BlackRock Advisors, appears to fall into this category. https://www.newyorkfed.org/markets/opolicy/operating_policy_230425
#Fintech#CryptoAssets#Stablecoins#Circle#USDC#UnitedStates#DFC
·coindesk.com·
Circle’s Hope for Access to NY Fed’s RRP Could Be Squashed by Policy Change
Circle launches cross-chain USDC transfer protocol for Ethereum, Avalanche
Circle launches cross-chain USDC transfer protocol for Ethereum, Avalanche
Circle has launched a mainnet protocol that lets users transfer its USDC stablecoin between Ethereum and Avalanche. Previously, Avalanche users who held USDC on Ethereum had to deposit their coins with a Circle partner or use a third-party bridge to transfer their USDC from one network to the other. The new Cross-Chain Transfer Protocol (CCTP) protocol appears to do away with this need for USDC bridges. Unlike a traditional bridge, it doesn’t lock tokens sent to its contract. Instead, it completely destroys them and issues new tokens on the receiving network. Users can redeem these new tokens for bank deposits directly, by depositing the tokens with Circle or its partners. https://www.circle.com/en/pressroom/circle-delivers-usdc-interoperability-across-ecosystems-with-mainnet-launch-of-cross-chain-transfer-protocol
#Fintech#CryptoAssets#Stablecoins#Circle#USDC#Avalanche#DFC
·cointelegraph.com·
Circle launches cross-chain USDC transfer protocol for Ethereum, Avalanche