Billion Dollar Stablecoin Fei Protocol Struggles As Token Drops Below USD Peg

Billion Dollar Stablecoin Fei Protocol Struggles As Token Drops Below USD Peg

Barely days after the stablecoin project Fei Protocol launched, it appears to be struggling—so much so that its 1:1 USD pegged token has dropped well below its targeted $1 value. Currently at $0.7916.

Fei in Free Fall

The stablecoin project, meant to be algorithmic and without volatility, lost its peg to the U.S. dollar this week. The asset was down by almost 80% at a time.

This caused an uproar on social media, with users complaining about the project and others suggesting solutions.

Compound (COMP) founder Leshner stated that the protocol was in this state due to a bug.

“Folks are watching Fei, a project that raised $1.3B, struggle at launch. It raised way more ETH than needed; most buyers were looking to immediately sell FEI back (peg pressure); then, to top it off, a bug disabled the primary stability mechanism. Not a recipe for stability.”

Meanwhile, the company has responded via its Twitter account. It disclosed that there was a vulnerability through its bug bounty program. This made the development team suspend mint rewards on Fei buys to ensure the protocol and PCV were secured.

Mint rewards are incentives users who buy Fei get to help it return its value to the dollar.

Fei Protocol added that the protocol is still overcollateralized, meaning more cryptocurrency collateral backing the set of Fei tokens. It assured users that the token’s value would return while also thanking users for their suggestions on solutions.

Fei Protocol Fighting Stablecoin Issues

Backed by many high-value investors, Fei Protocol aimed to create a stablecoin protocol that would outrightly buy assets with its token, rather than holding them as collateral for loans.

Fei had pointed out the obvious issues in already established stablecoins that were centralized and controlled by corporations with the focus of fighting them.

The stablecoin introduced the model called ‘Protocol Controlled Value’ (PCV) which means when users deposit collateral, the protocol owns and manages it so that liquidity cannot just be pulled out. The PCV is a subset of TVL (total value locked), in which a platform outright owns the assets locked into the smart contracts.

However, it appears Fei Protocol did not anticipate the high demand it received.

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Author: Jimmy Aki

MIT & Boston Federal Reserve Look to Reveal Two Digital Dollar Pilots by July 2021

MIT & Boston Federal Reserve Look to Reveal Two Digital Dollar Pilots by July 2021

The Federal Reserve Bank of Boston and researchers from the Massachusetts Institute of Technology (MIT) are making giant strides in their digital dollar program, according to a Bloomberg report.

Boston Fed To Launch Digital Dollar Prototypes

Researchers from both institutions are reportedly preparing to launch prototypes of two central bank digital currencies (CBDCs) platforms as early as July 2021.

The prototypes would store, move, and settle digital dollar transactions providing ease and convenience for an already crypto-acclimatized population, says James Cunha of the Boston Fed.

Cunha, who declined to state whether any of the prototype platforms would be based on a distributed ledger technology (DLT), said that the financial agency would not delay making their research findings public. Cunha added,

“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.”

Apex banks like the People’s Bank of China (PBoc) are reportedly ahead of the pack. The Asian giant, which has been steadily exploring CBDC use cases, has conducted pilot tests in 2021 and would likely see a more distributed approach in the coming year.

Other countries like the Latin American nation, the Commonwealth of the Bahamas, have launched a digital version of their fiat currency called the “Sand Dollar” in 2020.

European nations like the UK are currently researching the technology and monitoring economic impact while others like the Swiss have postponed the program till the following year.

Big Tech Looks To Cash In On CBDCs

But amid all the mixed reactions, CBDCs seems to have gained more fans in the rapidly-growing digital economy. Federal Reserve boss Jerome Powell admitted as much in a recent virtual conference featuring central banks worldwide. In his closing comments, Powell said CBDCs would not outrightly replace the more traditional dollars but would be integrated into the extant payment systems and other forms of money.

But even as the world is slowly coming to grasp what many has described as a “shaking up” of the financial system, some others think a digital dollar may be unnecessary.

In a statement to Congress, the American Bankers Association said that introducing a “Fedcoin” (another name for CBDCs in the US) could bring unintended consequences. To the body, these digital caricatures could threaten the banking system’s stability, and there is no guarantee of it bringing about greater financial inclusion.

This position is one that most legacy financial institutions are taking- calling CBDCs a “costly solution” to a problem that does not exist. But digital payments companies like Visa and MasterCard are already on the treadmill to ensure their platforms get listed to provide these services.

Visa’s North America Chief Oliver Jenkyn said they are in conversations with regulatory agencies on how a potential CBDC would be designed. According to Jenkyn, these conversations would be backed by actions.

These actions were brought to the fore when VISA proposed that CBDC transactions could be validated without an internet connection in its whitepaper.

ViSA is not alone in the CBDC race, with embattled US blockchain firm Ripple Labs also launching a private version of its XRP Ledger (XRPL) protocol specifically for issuance and maintenance of CBDCs.

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Author: Jimmy Aki

Fed Is Investing ‘Time and Labor’ As A Digital Dollar is ‘High Priority’ says Chairman Powell

Fed Is Investing ‘Time and Labor’ As A Digital Dollar is ‘High Priority’ says Chairman Powell

The Federal Reserve is also “committed” to solving the tech problems. Treasury Secretary, unlike her predecessor, also says it “makes sense for central banks to be looking at.”

Federal Reserve Chairman Jerome Powell told Congress on Tuesday that a digital dollar is a “high priority project for us.”

While the central bank is “looking carefully” at the prospect of issuing a digital currency, Powell said there are “significant technical and policy questions” related to it. Powell said,

“We are committed to solving the technology problems and consulting very broadly with the public and very transparently with all interested constituencies as to whether we should do this.”

Much like always, the Chairman said that as the world’s reserve currency, the US doesn’t have to be the first, but the point is in getting it right.

“This is something we’re investing time and labor in, across the Federal Reserve System.”

Just this week, Treasury Secretary Janet Yellen also said that the Biden administration supports research into the viability of a sovereign digital currency, unlike her predecessor Steven Mnuchin who didn’t see any need for that at the point.

“It makes sense for central banks to be looking at” issuing a digital dollar, Yellen said at a virtual conference on Monday hosted by the New York Times.

According to her, the digital version of fiat currency can help with the financial inclusion of lower-income groups.

“Too many Americans don’t have access to easy payments systems and banking accounts, and I think this is something that a digital dollar, a central bank digital currency, could help with.”

“It could result in faster, safer, and cheaper payments, which I think are important goals.”

Janet Yellen Treasury Secretary

While positive about a digital dollar, Yellen echoed Powell’s views about needing to address the issues first.

“There’s a lot to consider here, but it’s absolutely worth looking at,” she said.

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Author: AnTy

Gemini Exchange Adds Singapore Dollar & Trading Pairs in Asian Market Push

Gemini Exchange Adds Singapore Dollar & Trading Pairs in Asian Market Push

The Winklevoss crypto exchange announced its expansion into Singapore’s growing crypto market. The exchange is hoping to take its operations to broader markets with the rumors of an IPO swirling.

With cryptocurrencies gaining traction worldwide, companies in the industry are also seizing the opportunity to push borders.

Gemini, the cryptocurrency exchange from the Winklevoss Twins, is the latest firm to announce a major expansion play.

Hello, Singapore

Yesterday, the exchange announced that it had expanded its operations to Singapore, setting itself up for bigger operations on the Asian continent. According to the announcement, the setup includes new features for Singaporean customers, including support for the Singapore dollar on its mobile and desktop platforms.

Gemini customers in Singapore can also use their fiat currency to purchase crypto. Payment options include electronic fund transfers and debit cards, allowing residents to enjoy the exchange’s full capabilities. Gemini will also partner with local data services like MyInfo and Singapore Personal Access to provide a more localized user experience for Singaporean customers.

In the statement, Tyler Winklevoss, the company’s chief executive officer, praised Singapore as a fast-growing market for the crypto economy.

The exchange also revealed that it had set up a local office in Singapore with full staffing. Several crypto and finance professionals have joined the company’s Asia Pacific team as well.

Singaporean customers will also be able to delve into the decentralized finance (DeFi) market. Gemini’s announcement confirmed that they can trade several top DeFi tokens, including YFI (for yield farming protocol Yearn FInance), UNI (for top decentralized exchange Uniswap), and FIL (for blockchain-based payment service FIlecoin). These are added to the 20 traditional crypto tokens available to Singaporeans on Gemini’s platform.

A Possible IPO

Gemini’s regulation-obsessed approach has set it apart from its competitors. The company thrives on establishing relationships with regulators and moving strategically.

The exchange has had some recent success, announcing recently that it had crossed the $10 billion mark for assets under management. Last April, it also scored a Service Organization Control verification from Deloitte. The certification meant that Gemini’s customer reporting protocols and financial operations were compliant with the American Institute of Certified Public Accountants’ requirements.

Gemini is also gearing up to launch a credit card with a three percent Bitcoin rebate feature, and it completed the acquisition of crypto payments service Blockrize.

With the crypto market experiencing significant growth, industry sources believe the exchange could be weighing their chances with an Initial Public Offering (IPO). Earlier this month, Bloomberg reported that the Winklevoss Twins were mulling a public offering, quoting the brothers saying:

“We are watching the market and we are also having internal discussions on whether it makes sense for us at this point in time. We are certainly open to it.”

The report added that the brothers had several means of getting this done, including seeking a traditional IPO or merging with a “blank-check firm to serve as a launchpad for the listing.

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Author: Jimmy Aki

Deeper Pullback in Precious Metals Indicates Flows Are Moving Towards Bitcoin

However, if the dollar rally continues on “that would sink a few boats.”

Cryptocurrencies are already leading the market gains in 2021.

On Friday, Bitcoin price nearly hit $42,000 and is currently holding strongly above $40k with over $14 billion in ‘real’ volume.

This week, BTC started with a dip to about $28,500 and since then has seen a 42% increment in its value.

“The surge in Bitcoin is indicative of froth but not only in that market, in many other areas where risk premiums have come down sharply in the past year despite a recession,” said Kevin Caron, portfolio manager for Washington Crossing. “We view Bitcoin as a proxy for risk appetite.”

Besides Bitcoin, altcoins also enjoyed a good week with notable mentions including Nano (256%), Pundi X (146%), YFL (130%), Stellar (128%), Loopring (126%), ROOK (118%), Nexus (107%), Verge (96%), ALPHA (87%), YFI (82%), SOL (78%), MATIC (67%), KIMCHI (62%), KP3R (60%), IOTA (58%), and Ethereum (58%).

These gains led to the total cryptocurrency market capitalization to climb to $1.09 trillion.

Bitcoin awakening

While cryptocurrencies are enjoying just another green week, the same is not the case for metals.

As we reported, precious metals have been taking a beating for three days in a row. Since Wednesday, spot gold has lost 6.6% of its value and is now seeing a slight relief to $1,847 per ounce. The same is the case for silver, which slid a good 12.8% during the same period.

These losses have been the result of the US dollar index rising and keeping above the 90 level. Unlike the traditional safe-haven asset, Bitcoin and the stock market remained unaffected by the greenback’s strength.

According to Charlie Morris of ByteTree, the deep slide in precious metals could be the result of flows moving towards Bitcoin. “If this continues, expect a dollar counter-rally. That would sink a few boats,” he said.

Much like gold, treasuries also sold off as investors focused on further stimulus. The sell-off in 10-year US Treasuries pushed their yields to their highest levels since March. Despite the UK economy losing 140,000 jobs in December, the first time in eight months. Francois Savary, chief investment officer at Swiss wealth manager Prime Partners, said,

“Investors are buying the end of an erratic Trump administration and looking forward to something new, which is a Biden presidency and the prospect of a significant spending program.”

The Biden administration is expected to be good for cryptocurrencies with the expectations for more stimulus and money printing. Frank Spiteri, chief revenue officer at CoinShares, said,

“It seems like we’re in the middle of a simultaneous awakening among institutions to Bitcoin as an uncorrelated store of value assets with the possibility of serving as an inflation hedge in the face of a highly unconventional monetary policy environment.”

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Author: AnTy

EU and UK Closes Historic Brexit Deal; Bitcoin Hits a New ATH

Sterling rejoicing, US dollar weak, while Bitcoin ready to move back above $25k while on price discovery.

The UK has finally reached a historic deal with the European Union, just days before the country was due to leave the bloc’s single market.

“We were told we couldn’t have our cake and eat it,” Prime Minister Boris Johnson told a press conference on being asked about the compromises to be made.

“I’m not going to claim that this is a ‘cakeist’ treaty, but it is I believe what the country needs at this time.”

The agreement will allow for quota and tariff-free trade in goods after December 31 but the same rule won’t apply for about 80% of the UK economy — the services industry.

The Guardian called the deal “nothing but thin gruel,” that will only make it harder for Britain to sell services in the EU. Besides losing the right to freely travel, work, and settle in other European countries, the British also have to comply with EU regulations.

“It was a long and winding road — but we have got a deal to show for it.”

“It is fair, it is a balanced deal and it is the right and responsible thing to do for both sides.”

Ursula von der Leyen European Commission President

Going Crypto

While little was changed in the US market, the Stoxx 600 Index gained after the deal. The British pound strengthened and is now nearing its highest since mid-2018.

As the pound rallied against most major currencies, the US dollar index remained just above 90.

“To some extent, the devil will be in the detail, yet markets and the pound are likely to celebrate almost any type of agreement that avoids a no-deal scenario,” analysts at IG said.

This has expected to bring some volatility in the markets, Bitcoin can feel some as well. Already, the digital asset is preparing for the expiry of bitcoin futures and options contracts on Friday.

Currently trading around $24,960 BTC 7.59% Bitcoin / USD BTCUSD $ 26,422.87
$2,005.50 7.59%
Volume 48.24 b Change $2,005.50 Open $26,422.87 Circulating 18.58 m Market Cap 490.99 b
7 h Bitcoin on Track to Become the 10th Largest Asset in the World & Beat Warren Buffett’s Berkshire Hathaway 9 h EU and UK Closes Historic Brexit Deal; Bitcoin Hits a New ATH 10 h Dave Portnoy’s Barstool Fund Accepts BTC, ETH & 10 Other Crypto’s in Donation to Support Small Businesses
, BTC hit a new ATH yesterday at $25,026.86 and is preparing to move above $25k again on the back of strong institutional demand.

Just this month, Brexit party leader Nigel Farage went “full crypto” while calling fiat currency “funny money,” which the governments continue to print at warp speed. This has made it “crucially important” to understand crypto, he had said. Elsewhere, he called Bitcoin “the ultimate anti-lockdown investment.”

Increased Interest

UK investors have actually been taking an increasing interest in Bitcoin, with 38 times more money in sterling being exchanged for the cryptocurrency on crypto exchange Kraken than this time last year, as per a recent report.

Marcus Hughes, Europe manager at crypto exchange Coinbase also said that the ongoing evolution in the industry is driving customer activity in the UK. “Increased levels of institutional interest, corporates, including MicroStrategy, taking Bitcoin onto their balance sheets and wider awareness of payment mechanisms” is driving the higher trading volume of BTC in the UK.

Recently, UK-based Ruffer, which manages £20 billion of assets has allocated 2.5% of its assets in Bitcoin just this month.

“This news is important because they are a well-regarded firm among UK wealth managers,” wrote Charlie Morris of ByteTree. “I believe UK wealth will have to find ways to follow suit.”

Additionally, the Financial Conduct Authority making it mandatory for companies selling crypto assets to register starting in January may be helping make the digital asset more acceptable for investors.

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Author: AnTy

Bitcoin’s Mainstream Media Mentions in December Beats Gold

A weaker dollar, investors betting on more US stimulus, and Britain and the EU appearing to be close to clinching a trade deal is pushing the markets higher.

Trading around $1,875, up from the $1,760 bottom at the end of November, gold is enjoying an uptrend on the back of a weaker dollar, which is currently hovering around 90.

Also, investors are betting on more US stimulus, as President Donald Trump urges for $2,000 stimulus checks, calling the $600 direct payment a “disgrace,” which has found support from House Speaker Nancy Pelosi and other Democrats as well. Margaret Yang, a strategist at DailyFX said,

“Gold prices are riding a near-term bull trend, propelled by a weaker dollar and a new strain of coronavirus that could derail the (economic) recovery, hinting at further stimulus ahead.”

However, precious metals’ 23% year-to-date performance is nothing on digital gold’s more than 220% gains this year.

Bitcoin is simply crushing in 4Q20, having made a new all-time high at $24,300 this past weekend and still holding on strong to its $23k level.

Besides money printing, the reports of Britain and the European Union appearing to be close to clinching a trade deal are pushing the US dollar down and lifting the pound and euro up. Jeffrey Halley, a senior market analyst at OANDA, said in a note,

“The overnight rally leaves gold parked in the middle of its one-week range, lacking the drivers and momentum to attempt a directional move either way.”

Gold’s ranging and bitcoin’s explosion has pushed people to BTC which continues to enjoy a strong uptrend, thanks to all the institutional demand.

As we reported, Christopher Wood, global head of equity strategy at Jefferies cut down the gold exposure by a whopping 50%, for the first time in several years, in favor of BTC.

Interestingly not just in terms of price performance, but Bitcoin has also been seeing more mentions than gold in mainstream media financial publications in the last month of 2020. BTC mainstream media mentions are up more than 1,000% since January, as per The Tie.

image1

However, much like some skeptics, Shark Tank’s Kevin O’Leary sees gold as a hedge against inflation and says it won’t be replaced by Bitcoin anytime soon. But the chairman of O’Shares ETFs said that the digitization of America is here to stay.

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Author: AnTy

Algorand Blockchain Adds Canadian Dollar Backed Stablecoin, QCAD, On Its Platform

Algorand blockchain welcomes its third stablecoin, QCAD, the Canadian dollar stablecoin built, issued, and managed by Stablecorp, a Canadian based fintech firm founded in a joint partnership with 3iQ, Canada’s largest crypto asset manager, and Mavennet Systems, a blockchain development firm.

In a press release statement on Thursday, Stablecorp Inc, a Canadian dollar stablecoin issuer, announced its partnership with Algorand to launch its digital asset on the latter’s blockchain. Algorand offers decentralized applications and projects a secure, scalable, and decentralized network that Stablecorp aims to leverage by launching QCAD on top of the blockchain. Algorand Foundation also released a grant to Stablecorp to incentivize the development of the stablecoins capabilities atop Algorand.

Jean Deagagne, CEO of Stablecorp, is looking forward to leveraging Algorand’s “robust and secure high throughput infrastructure” upon integrating QCAD stablecoin, he said in a statement. Furthermore, Algorand’s unique capabilities aim to expand the use cases of QCAD to spark mass adoption of the asset and “explore and scale new enterprise and consumer implementations,” he added.

According to the statement, the QCAD project is the first fully-regulated and mass-market stablecoin, “currently supported by over 22 different ecosystem partners, including exchanges, custodians, payment providers, and decentralized exchanges (DEXes)”.

Apart from providing a secure and robust platform for the stablecoin, Algorand also allows microtransactions, instant confirmation times, and wallet support for the token. Algorand testnet recorded over 1000 transactions per second, way faster than Bitcoin or Ethereum transaction times – at 7TPS and 15TPS, respectively. Sean Lee, the CEO of Algorand Foundation, said in a statement to BEG,

“The global scale and speed of the Algorand protocol will enable the high transaction volumes that will facilitate new and innovative consumer innovation using QCAD.”

QCAD becomes the third stablecoin built atop Algorand blockchain following the additions of dollar-backed Tether (USDT) and Circle’s USDC stablecoin. As a high throughput blockchain, Algorand opens up the use of high volume stablecoins on its unique globally scalable, secure, and instant platform.

The Canadian government has also been on its feet monitoring digital currencies, the benefits and flaws of launching a CBDC, and the role of blockchain systems in the economy. Recently, Canada announced plans to team up with other G7 countries to launch the CBDC, calling for more global cooperation between nations.

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Author: Lujan Odera

“Short the Dollar”, says Bitcoin-friendly US Congressman, Warren Davidson

US Congressman Warren Davidson, a Bitcoin proponent, tweeted on Tuesday, “Short the Dollar.” This has been in response to the Twitter account of Forbes Crypto asking the community to sum up cryptocurrencies in 2020 in three words.

Davidson replied with shorting the US dollar and the hashtag “Sound Money,” referring to Bitcoin.

According to him, Bitcoin is a “great store of value,” which he views “like digital gold versus a true currency.” But he doesn’t own any personally. Davidson’s reply triggered some, Rohan Grey being one of them who wrote,

“Another brilliant monetary insight from one of the Republicans who opposes the #STABLEAct.”

Grey, an assistant professor at Willamette University College of Law, has recently been in the limelight helping draft the controversial Stablecoin Tethering and Bank Licensing Enforcement (STABLE) Act.

Grey also worked with Rep. Rashida Tlaib on the Public Banking Act draft, which was introduced in October, and a COVID relief plan to invest in the digital wallet.

The latest draft STABLE Act requires any stablecoin issuer to obtain a banking charter and approval from the Federal Reserve and be FDIC-insured. This bill further holds the node operators and network upon which these fiat-based cryptos will operate liable.

According to him, it’s about the systemic risk that stablecoins pose, and as they become larger, they are no different than any other big financial institutions. For him, even if an instrument is issued on a decentralized network, if it is “trying to walk and talk like money, and therefore carries a systemic risk, it should be regulated like money.” Grey said,

“I hold the view…that decentralized networks are not sort of a crowd where there’s nobody liable—that there are actors you can point to that operate and govern and make decisions related to key parts of that infrastructure.”

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Author: AnTy

The US Dollar Lost 99.9% of its Value to Bitcoin in Just Last 8 Years

Whistleblower Edward Snowden, a Bitcoin advocate, tweeted on Monday, “Today I learned the dollar had lost 99.93% of its value since 2013 (relative to Bitcoin).”

Recently, Crypto Twitter also called on President Donald Trump to grant clemency to Snowden, activist Julian Assange, and Silk Road founder Ross Ulbricht.

In 2013, Bitcoin was worth a mere $100, and this month, the price of Bitcoin climbed to a new all-time high at about $19,950.

image1

Not only USD, but Bitcoin has also actually wiped the floor with other fiat currencies like Venezuelan Bolivar and Argentine Peso.

1 US dollar is currently worth 5,212 sats
Source: USDSat.com

In 2020, while the leading digital asset has been enjoying a rally attracting the attention of institutions, the US Dollar Index went from almost 103 to under 90.

“Institutional investors are keen on portfolio construction in the wake of Covid, and the ways they need to reposition themselves given how governments have injected stimulus into the system,” said Michael Sonnenshein, managing director of Grayscale Investments.

Interestingly, while the price of Bitcoin has all the space to rocket too; the limited supply of the leading digital currency only has 2.5 million left to be mined.

Institutional FOMO

Since hitting a new high on several cryptocurrency exchanges, Bitcoin has gotten stuck in a range, trying to make up its mind if it wants to make a run for $20,000 or $17,000. Currently trading around $19,160, less than $1.79 billion has been recorded in volume.

However, the digital asset did make an all-time high weekly close over the weekend, keeping its gains over 167% run-up YTD.

Unlike the previous bull run of 2017 which was retail-driven, this time the financial industry is the one playing a bigger role in this market.

“The multitude of regulated crypto exchanges and custodians has eliminated the ‘career risk’ for institutional investors,” PwC’s Hong Kong-based Global Crypto Leader Henri Arslanian said in an interview with Bloomberg. “In 2017, there was retail FOMO. The question is whether we will see institutional FOMO in 2021.”

Having already run to just inches away from $20k, the market has been predicting some wild targets for this cycle that goes as high as $100k to $300k.

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Author: AnTy