Category: Stablecoins

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Crypto Debit Cards Crypto News Ethereum Industries Stablecoins

Visa Allows USD Coin (USDC) Cryptocurrency to Settle Transactions

Visa announced on Monday that it now allows partners of its network to clear fiat transactions with the USDC stablecoin using the Ethereum blockchain.

Visa Using Ethereum Blockchain

Visa’s most recent move, will allow them to utilise the Ethereum blockchain, this removes the need to convert digital currency into traditional money in order for the transaction to be settled. Where this would traditionally be the case. For example, Crypto.com won’t have to go through conversions and can settle with Visa directly in USDC.

Visa said it has partnered with digital asset bank Anchorage, the first federally chartered digital asset bank, and completed the first transaction this month — with Crypto.com sending USDC to Visa’s Ethereum address at Anchorage. The (USDC) is a stablecoin cryptocurrency, and its value is directly linked to the U.S. dollar.

USDC Icon: Circle

Visa came to us in 2019 with an idea—make secure, efficient, and seamless settlement payments possible in digital currency by linking Visa’s treasury with Anchorage’s custody platform.

Diogo Mónica, co-founder and president of Anchorage

The credit card giant is already partnering with 35 digital currency platforms, including Coinbase, Crypto.com, BlockFi and Bitpanda, which collectively have more than 50 million active users.

We see increasing demand from consumers across the world to be able to access, hold and use digital currencies and we’re seeing demand from our clients to be able to build products that provide that access for consumers.

Cuy Sheffield, head of crypto at Visa

“Crypto-native fintechs want partners who understand their business and the complexities of digital currency form factors,” said Visa chief product officer Jack Forestell. “The announcement today marks a major milestone in our ability to address the needs of fintechs managing their business in a stablecoin or cryptocurrency.”

The firm said it aims to make this system available to Fintech companies and neobanks dealing in cryptocurrencies including Bitcoin (BTC), Ether (ETH), and USDC. After further testing and additional conversations with its clients, partners, and members of the regulatory community, Visa hopes to launch the USDC settlement capability for other partners as well “in the year ahead.”

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Crypto News Regulation Stablecoins

MIT and Boston Fed Releasing Digital Dollar Prototypes “as soon as July”

Researchers from the Federal Reserve Bank of Boston and MIT are conjuring what might be a major disruption to the financial services industry by creating a digital dollar.

According to James Cunha, head of the digital dollar project at the Boston Fed, there are already at least two prototype platforms that allow users to store and make transactions using the currency.

Digital Dollar [source: Flickr]

It’s not clear whether the platform uses blockchain as its underlying technology. However, back in August 2020 when the Fed-MIT collaboration was discussed, Federal Reserve Board Governor Lael Brainard said that the code will be open-source, meaning others will be able to see and build on it after it’s completed.

Creating a Central Bank Digital Currency (CBDC) Could Disrupt The Financial Industry

Jerome Powell, chairman of the Federal Reserve, also recently stated that the COVID pandemic had made clear that there are shortcomings with the current “arrangements”. He also said that there is a need to investigate ways in which speed and security in monetary systems around the world can be increased.

Jerome Powel [source: Flickr]

The potential that the central bank could cut banks out of their middleman role in the lucrative U.S. payments system is causing angst among banks.

Senator Sherrod Brown, the new chairman of the Senate Banking Committee, is urging the Fed to move quickly to create digital-currency accounts for Americans who can’t easily access the financial system and have been forced to deal with payday lenders who charge higher fees and interest rates. Those without bank accounts sometimes must pay high fees to cash paychecks or transfer money to relatives. These new systems could benefit disenfranchised citizens in many ways.

Everyone is afraid that you could disrupt all the incumbent players with a whole new form of payment.

Michael Del Grosso, analyst at Compass Point Research & Trading

However, this virtual currency could still be years away since it has not yet been approved by U.S. Treasury Department, Federal bank, or lawmakers. It also has not been decided how it will be incorporated into the current system. Still, the U.S. and other countries seem committed to digitizing their currencies enough to make financial industry executives nervous.

The Move to Digital Currency

A few countries have seen the potential of digital currencies and have started creating pilot projects to determine the range of applications.

We think it’s important that we not wait for the policy debate because then we’ll be a year or so behind. This will take significant outreach to the industry and serious debate.

James Cunha, head of the digital dollar project at the Boston Federal Bank
The Race to a Digital Currency [source: Bloomberg]

It looks like some countries are aiming to make some serious strides towards the adoption of digital currencies or at least to pilot projects to determine the benefits it could hold.

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Australia Crypto News Stablecoins

RBA Governor Philip Lowe Reiterates Plans For An Australian Digital Currency

RBA governor Philip Lowe reiterates plans for a wholesale CBDC

Philip Lowe, the governor of the Reserve Bank of Australia, has reiterated intentions for launching an Australian national digital currency.

It’s no longer surprising that many central banks around the world are increasingly exploring and studying the possibility of launching a national digital currency (known as a “CBDC”). In fact, the Bank of International Settlement confirmed in a survey that about 80 percent of central banks planned for a CBDC.

Banks can use digital currencies for settlements

While speaking with the Melbourne Business Analytics Conference on Monday, the governor mentioned that the Australian central bank “is conducting research on the technologies and policy implications of a potential wholesale central bank digital currency.”

The world is gradually transitioning to digital alternatives for payment, especially since the cash bans of outbreak of the coronavirus pandemic.

Lowe said technology (blockchain) and data are unlocking this new possibility through digital currencies. Through distributed ledger technology, many big banking institutions could use digital currencies in the future to support the settlement of transactions in the inter-bank payment system, instead of transacting in “regular” Australian dollars.

RBA is still working on a Wholesale CBDC

The RBA governor also stated that the central bank is still working on the concept for a wholesale CBDC via its in-house Innovative Labs.

As of February 20, Crypto News Australia reported that the central bank was being sceptical about a retail CBDC. The Payments System Board of the central bank noted that they don’t see any strong case to launch a retail-focused CBDC. Instead, the bank was researching the feasibility and implications of launching a wholesale CBDC.

Wholesale CBDCs are more beneficial to financial institutions for payment and settlements than retail CBDCs, which are designed for general public use.

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DeFi Stablecoins

Introducing Origin Protocol, The First Stablecoin That Earns a Yield

Blockchain-powered commerce project Origin Protocol has created the OGN token (nicknamed the “Origin Dollar”) which can be staked to earn up to a 25% yield.

Using the OUSD platform you can select from 3 options OGN staking options, which you will be able to claim your OGN principal plus interest at the end of the staking period.

  1. 30 days lock-up earning 7.5% APY
  2. 90 days lock-up earning 12.5% APY
  3. 365 days lock-up earning 25% APY

In order to participate you need to use a DeFi wallet to connect and deposit your funds which will then be secured using an Ethereum smart contract. See the OGN token details which include supply and unlock schedule. Yield-generating DeFi products are brand-new and you should read the risks involved before participating.

About Origin Protocol

The team has a lot of pedigree with serial entrepreneurs including a founder of PayPal, early employees at YouTube, and engineering managers at Google and Dropbox.

Fortune Magazine’s Balancing the Ledger with Origin Protocol’s Founders

The company is projecting that blockchain ecommerce is going to be one of the fastest growing areas in the blockchain industry during the next few years.

Benefits of Origin Protocol include:

  • Lower fees – Buyers and sellers share 20-30% in savings when middlemen are removed
  • Better incentives – Everyone can own a stake in the network by contributing to its growth
  • Increased access – 2 billion unbanked people can access new markets globally
  • More resilience – Blockchain-powered commerce can’t be banned or shut down

Dshop: Blockchain-powered Online Commerce

Along with the stablecoin, Origin also introduced a new service called Dshop. It’s an e-commerce platform that can be used to create a free online store, harnessing the power of a decentralized platform and allowing customers to pay in cryptocurrencies.

It seems clear that blockchain technologies will redefine online commerce and allow both buyers and sellers to benefit from lower costs and improved infrastructure.

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Australia DeFi Stablecoins

Aussie Programmer Refinances His Property Loan With DeFi In A Single Day, Following Red Tape From Banks

A software engineer has paid off his mortgage to the Commonwealth Bank of Australia and refinanced it through fixed-rate lending protocols, after finally having enough of getting nowhere with traditional banks.

Offsetting Loans

According to the software engineer, he decided to – quite literally – become his own lender after going around in circles with banks.

As a self-employed professional, he believes banks took advantage of this in order to deny him even a credit card for multiple years – especially seeing as the world is currently going through a period of economic turmoil.

In order to do so, the software engineer first paid off his loan in AUD – after which he borrowed USDC from Notional, using liquidity he already owned in order to avoid high fees.

He then added about $1 million in wrapped Bitcoin and Ethereum as collateral for a new 500,000 USDC loan.

Although the borrowing rates requested by Notional are around 6% some of that can be offset – provided you provide liquidity that you can earn money off of.

The newly (and self)made one man banking system stated that everything went much faster than it would have, had he stuck to traditional banks.

“I feel like I’m in full control of my situation. People should be all over this stuff. It felt like it would’ve taken months of applications, finding tax returns and bank statements for the bank to refinance me, but I was able to do it all in one day, under my own agency.”

Although the whole procedure took quite a bit of forethought, it paves the way for more transactions of the sort – AAVE, in particular, have hopped on the mortgage train recently following their marked increase in popularity.

Although this may be a one-off thing, it’s not improbable that in the future we will see plenty more early bird investors buying a new house due to a bitcoin faucet they used a decade ago.

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Australia Blockchain Crypto News Stablecoins

EFTPOS Australia To Run Hedera Hashgraph Node

EFTPOS is primed to join the Hedera Governing Council following tests that were run in order to determine the feasibility of a digital AUD for micropayment purposes.

EFTPOS is known for its financial services that include the mobile wallet Beem It – and also runs lesser-known services such as digital identity checks for joining public and private networks, as well as a national QR code payment system.

Local Node To Be Up And Running Within The Year

Hedera Hashgraph is a highly scalable enterprise-grade distributed ledger that is already helping Australia by ensuring the quality of Aussie agriculture.

Hedera is run by a number of leading tech companies worldwide – with their Governing Council including high-profile firms such as WIPRO, Avery Dennisson, DLA Piper, Boeing, Google, LG Electronics and IBM.

Following EFTPOS Australia’s joining of the council, it will establish it’s own Hedera node as proof of commitment to Hedera’s global project.

According to Stephen Benton – the CEO of Eftpos – the Hedera endeavour may open up Australian businesses to new, secure ways of running their affairs.

“By joining the Hedera Governing Council and running the Australian node, alongside some of the world’s largest and most influential companies, we are excited to participate in the development of next-generation micropayments technology that has the potential to open up entirely new ways of conducting business for Australian enterprises and enable compelling new experiences for Australian consumers.”

The Australian side of the project will see the new eftpos API infrastructure connected to an AUD-based stablecoin.

The stablecoin side of the project was led by Robert Allen, an EFTPOS’ entrepreneur.

“Use cases like this simply are not possible on other public blockchains. Along with several partners, we are now exploring a variety of use cases that this combination of technologies enables and the options to commercialise them.”

Although rather secretive, the above statement seems to indicate that the project will be expanding – and coupled with the RBA’s own research into a digital AUD, more widespread use of the digital CBDC may not be too far off.

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Stablecoins Tether

USDC Supply Reaches $5 Billion as Tether Dominance Drops below 80%

A recent stats report by Coin Metrics, shows USD Coin (USDC) supply reaching US $5 Billion, rising from just 500 Million since last year.

Source: Coinmetrics.io

About USD Coin

USD Coin (known by its ticker USDC) is a stablecoin that is pegged to the U.S. dollar on a 1:1 basis. Every unit of this cryptocurrency in circulation is backed up by $1 that is held in reserve, in a mix of cash and short-term U.S. Treasury bonds. The Centre consortium, which is behind this asset, says USDC is issued by regulated financial institutions.

In 2020, Circle and Coinbase collectively announced a major upgrade to USDC’s protocol and smart contract. The goal of these enhancements is to make it easier for USD Coin to be used for everyday payments, commerce and peer-to-peer transactions.

Tether Dominance Drops below 80%

As a result on USDC growth, Tether’s share of total stablecoin supply is decreasing. Although Tether is still by far the most dominant stablecoin, it’s down to only about 75% of the total market. This is its lowest share of total supply since January 2019.

Source: Coinmetrics.io

USDC Coin Price Flatlines

Also we noticed that the USDC coin price has stabilised around the US $1 mark (which is the price it represents). This may lead to it being used instead of USDT by traders as they come in and out of BTC and other coins.

Source: Coinmarketcap.com

You can find more news about Stablecoins here.

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Bitcoin Bitcoin Mining Crypto News Crypto Trackers Cryptocurrencies Ethereum Investing Markets Stablecoins Tether Worldwide

Crypto Market Cap Hits One Trillion US Dollars

The overall cryptocurrency market capitalization has reached one trillion US dollars for the first time in history, according to data from the leading crypto statistics site Coinmarketcap.com.

Major cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) have seen exponential gains over the past few months, both rising by over 300% since November. Some smaller cap crypto assets and digital tokens like Chainlink (LINK), Cardano (ADA), and Polkadot (DOT) have enjoyed similar price rallies.

Bitcoin’s market valuation recently catapulted to $650 billion, overtaking major US investment firm Berkshire Hathaway, with a $533 billion market cap. Berkshire Hathaway was acquired and reformed in the 70s by iconic investor Warren Buffet, who remains its chairman and CEO to this day. Buffett has historically been very vocal about his dislike of cryptocurrencies, once famously calling Bitcoin “rat poison squared”. 

Despite Bitcoin being the best performing asset of the past decade by a large degree, Buffett continues to discount its worth, insisting that it has no value and is purely speculative. However, several major tech firms and financial institutions disagree, such as 170-year-old Mass Mutual which recently bought up $100 million worth of Bitcoin. A small amount compared to the world’s largest digital currency asset manager, Grayscale, with over $20 billion invested in crypto assets.

Image from Howmuch.net
Image from Howmuch.net

Criticism

Naturally, the extreme gains mean the cryptocurrency market has once again come under fire from critics who believe that asset prices are being manipulated. As with the previous 2017 rally, many critics believe that USDT tokens printed by stablecoin company Tether are being used to artificially prop up the cryptocurrency market – much like the US Federal Reserve props up traditional stock markets with seemingly endless USD issuance.

The concerns are not without merit, especially considering Tether’s continued reluctance to prove that it’s USDT tokens are fully backed by genuine dollar reserves. Tether has been minting millions of dollars in USDT tokens lately, presumably to meet the demand of consumers cashing out their Bitcoin profits or buying USDT as a digital onramp to the crypto world. Without clear and transparent auditing of this issuance, it’s fair to say the situation has the potential for abuse and manipulation.

One argument that challenges this theory is PlanB’s Bitcoin stock-to-flow model, which has accurately tracked the price movements of the BTC/USD trading pair over several years. The model reveals how the price of Bitcoin closely follows a set pattern dictated not by buyers or sellers but rather scarcity created by the algorithm which halves the BTC mining reward every 210,000 blocks. Price movements from the very first Bitcoin halving in late 2012 – long before Tether started printing in 2015 – correlate with Plan B’s stock-to-flow model. This suggests that the current price rally and the one following the previous 2016 halving are simply a result of Bitcoin’s coding rather than any external manipulation.

Image from PlanB (@100trillionUSD) on Twitter
Image from PlanB (@100trillionUSD) on Twitter
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Stablecoins Tether

Tether (USDt) Market Capitalization has Surpassed US$20 Billion

Tether (USDt) Market Capitalization has Surpassed US$20 Billion

The fourth-largest digital currency, Tether (USDt) reached a milestone record of US$20 billion on Friday. The record further strengthens the digital currency’s position as the largest United States dollar-backed stablecoin to a great extent. With lots of USDt minted on several blockchain networks, including Ethereum, Tron, etc., it’s worth mentioning that gained massive adoption for trades this year. 

Not if the second-largest stablecoin USD Coin (USDC) is closing in with its US$3.2 billion market valuation.

USDts are now a US$20 Billion Asset Combined

In celebration of the historic increase in USDt market capitalization, Tether, the company behind the stablecoin, tweeted the development, saying “this fantastic milestone is another confirmation for Tether maintaining its number one spot as the most liquid, stable and trusted currency.” Noteworthily, a huge number of USDt has been issued this year alone, which signals a strong demand for the stablecoin for settling transactions, and mostly for trading. 

At the time of writing, the maximum supply of the stablecoin is 20,533,323,926 USDt, of which 20,038,839,262 USDt is currently in circulation, according to the information provided by Coinmarketcap. One factor that indicates the strong demand for the stablecoin in trading is the fact that it has a very high 24 hours trading volume. 

Per Coinmarketcap, the US dollar stablecoin sees US$80 billion 24hrs trading volume, which is way bigger than other popularly-traded cryptos, including Bitcoin (US$48 billion), Ether ($19 billion), Ripple ($16 billion), etc.

USDt on Ethereum and Tron Blockchain

Ethereum and Tron are the two biggest blockchain networks, respectively hosting the stablecoins. According to Etherscan, the Ethereum blockchain explorer, there are currently 12.6 billion USDt issued on the blockchain. The rival blockchain network, Tron, holds 6.4 billion of the stablecoin, all of which are currently in circulation, per Tronscan.

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Crypto News Regulation Stablecoins Tether

Is the New STABLE Act Really a Threat to Crypto?

US Congress

On December 2, 2020, three members of the US House of Representatives, Michigan Democrat Rashida Tlaib along with Congressmen Jesus García and Stephen Lynch, introduced a new stablecoin regulation bill dubbed the Stablecoin Tethering and Bank Licensing Enforcement (STABLE) Act. 

The rather conveniently titled STABLE act proposes some strict restrictions on the issuance of digital versions of the US dollar. Essentially, it requires that any US-based company like Facebook that wishes to issue a stablecoin backed by the US dollar must become a bank. Should the act be passed into law, private US-backed stablecoin operators like Tether (USDT), USD Coin (USDC), and Paxos Standard (PAX) will be required by law to obtain not only a banking charter but also approval from the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and financial regulators.

Now, all this makes some sense – the US can’t have every Tom, Dick, and Harry handing out digital tokens like sweets and claiming they’re backed by “safe and reliable” dollar bills. Tether has been doing this for quite a while now and has racked up a rather sizable amount of supposedly government-backed USDT tokens to the tune of almost $20 billion. Even though that number is equivalent to only 0.08%  0.07%  0.06% of the total US national debt, it’s still a fairly large sum. 

US Congress is understandably concerned that should such a large company default on its liabilities, there would be more than a few extremely unhappy customers. So, to avoid a crypto version of the 2008 financial crisis, regulations like the STABLE Act are allegedly here to ensure that the ever trustworthy Federal Reserve keeps a close eye on your money. 

So how is this a threat to crypto?

The proposal of the act has sent ripples through the crypto community, some of whom fear the stifling regulations could limit market activity or even turn node operators into criminals. Others feel it would hinder the development of blockchain and cryptocurrency technology just at a time when it’s getting started. Jeremy Allaire, CEO of Circle, the company that issues USDC, had this to say:

“The STABLE Act would represent a huge step backwards for digital currency innovation in the United States, limiting the accelerating progress of both the blockchain and fintech industry.”

While their concerns are valid and the regulations could be disruptive, some form of insurance for crypto consumers does seem pertinent. Regulations in the form of STABLE may be overbearing but there are areas of the crypto sector that could do with better oversight. One can’t help but question why Tether remains resistant to an audit that would confirm the dollar-backed status of its reserves. It doesn’t help that its parent company, iFinex Inc, is embroiled in an ongoing lawsuit with the New York Justice Department regarding the cover-up of $850 million in lost co-mingled client funds.

Amy Castor suggests Bitcoin’s rise is akin to magic. Source: amycastor.com

If you believe, as some do, that USDT tokens are not fully backed by anything tangible, then the implications of the STABLE act could be far-reaching. If for whatever reason, Tether was unable to keep operating and was not able to honour all the USDT tokens in circulation, the crypto market would certainly take a knock. With Tether headquartered in Hong Kong, it’s uncertain how the regulations may affect the company.

At the end of the day, whether the STABLE Act truly poses a threat or not, it further highlights a pressing need for greater decentralization in the crypto community. Ideally, an ecosystem that doesn’t rely on favourable government regulations and outdated fiat on-ramps but rather an evenly distributed, community-led system secured by code.