STASIS Stablecoin Digest 09.12.2019

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Regulation and monetary policy

A couple of United States lawmakers are looking to classify stablecoins as securities. With Libra considering adopting fiat-pegged stablecoins rather than a single token supported by a basket of national currencies, the proposed crypto project might be facing yet another regulatory hurdle.

The current chairman of the CFTC, Heath Tarbert, has called for “principles-based regulation” for cryptocurrencies. According to the chairman, regulators should first fully understand the outcomes and potential risks of digital assets before enforcing their rules.

A Danish court has ruled that Scandinavian financial services giant Nordea can bar its employees from owning Bitcoin (BTC) and other digital currencies.

The central bank of France is planning to carry out experiments with its own digital currency (CBDC), Governor of the Bank of France and Chairman of the Autorité de contrôle prudentiel et de resolution (ACPR) François Villeroy de Galhau said at the ACPR, Paris, 4 December 2019.

In its annual report for 2019, the regulators stated, “If a stablecoin became widely adopted as a means of payment or store of value, disruptions to the stablecoin system could affect the wider economy. Financial regulators should review existing and planned digital asset arrangements and their risks, as appropriate.”

Council of the European Union has issued a report, according to which the EU decision-maker will ban all stablecoins until all of the risks related to them and concerns are properly addressed.

As part of its latest annual report, the council has now identified digital assets and stablecoins as major areas for concern, urging closer scrutiny of existing laws and a review of new products in the blockchain space.

Cryptocurrency exchange Gemini burnt about one-fifth of its Gemini Dollar (GUSD) stablecoin total supply on Dec. 3.

Gemini, the top global cryptocurrency exchange per CryptoCompare’s latest Exchange Benchmark, hired a former senior executive from United Kingdom-based Starling Bank.

Co-Founder of a fintech company Circle Sean Neville will step down as co-CEO of the company at the end of December.

European Central Bank (ECB) board member Benoit Coeure has warned that global stablecoins remain untested and raise potential risks across multiple policy domains.

Bank of Japan (BOJ) Governor Haruhiko Kuroda said that there is no public demand for a central bank digital currency (CBDC) in the country.

German multinational investment bank and financial services company Deutsche Bank has revealed a new outlook for the decade ahead, according to which, cryptocurrency could replace fiat money by 2030.

Major Danish bank Saxo Bank has predicted that Asia will launch its own blockchain-based digital asset in its new report of smashing predictions for 2020.

Coinbase's visa debit card has announced on Twitter it added support for DAI (DAI) stablecoin. From now on, the exchange's card supports 10 cryptocurrency assets.

Coinbase now gives its 30 million users the opportunity to earn DAI by opening a Collateralized Debt Position (CDP) on Maker. As it explains in its Earn program, this is a way of creating the stablecoin DAI, by putting up some cryptocurrency as collateral.

Major cryptocurrency exchange Binance listed four Russian ruble trading pairs, according to an announcement on Dec. 2.

San Francisco-based fintech firm Figure Technologies has secured $58 million in a recent funding round which aims to raise a total of $103 million.

Commerzbank, Credit Suisse and UBS carried out the first transactions on Deutsche Boerse and HQLAX’s distributed ledger technology-enabled (DLT) security lending platform.

The coin will be a stablecoin pegged 1:1 to the U.S. dollar — which the BVI have used since 1959 — and its use is expected to reduce transactional fees, increase transaction speed and be accessible to outsiders such as tourists.

The company reportedly conducted a public test with 635 participating nodes to reveal the transaction speed of the Locus Chain technology. The results showed that a single blockchain transaction took between 0.13-0.23 seconds.

Portag3 Ventures, a Canadian venture capital (VC) firm, has closed a second fund with around $320 million to invest in fintech startup companies globally.

Saga’s SGA digital currency relies on an international reserve asset called Special Drawing Rights (SDR), which was introduced by the International Monetary Fund in 1969. This is a conventional basket of major world currencies — the US dollar, the euro, the British pound sterling, the Japanese yen, and the Chinese renminbi — that central banks around the world use to hedge against fluctuations in their own local currency. SGA borrows this model for a financial instrument and puts it on the blockchain.

BiLira, a stable cryptocurrency that is backed by the Turkish Lira (TRY), where users can always buy and redeem 1 BiLira (TRYB) for ₺1.00 Turkish Lira, is soon to launch.