Facebook-Led Stablecoin Project, Diem, Planning A ‘Small-Scale Pilot’ in 2021

Facebook-Led Stablecoin Project, Diem, Planning A ‘Small-Scale Pilot’ in 2021

The pilot will be available to individual customers and merchants. Formerly known as Libra, the project has faced constant regulatory pressure in the past.

Facebook-led digital currency project, Diem is set to launch a small-scale pilot project of its first stablecoin later this year, a source familiar with the matter told CNBC. According to the report, Diem Association, a Switzerland-based firm building the project, plans to launch a dollar-backed stablecoin largely focused on payments between individual clients.

The pilot stablecoin will also be used across merchant shops allowing users to buy goods and services, too, the anonymous source further stated.

Diem is currently in talks with the Swiss regulators to obtain a payment license, CNBC’s report further reads. This follows a difficult period dealing with regulators in the U.S. and constant backlash from global financial authorities who have stated the dangers of the stablecoin on the global monetary system and money laundering.

Launched as Libra in 2019 and rebranded to Diem last December, the project has backtracked its steps in creating a Libra stablecoin backed by several fiat currencies such as the dollar and euro multiple “stablecoins” backed by a range of assets. Speaking to CNBC, Ran Goldi, CEO of First Digital Assets Group, stated the vision and goals of Diem have “changed dramatically over the past year and a half from a naive blockchain to a very sophisticated blockchain” to be in line with financial regulators across the globe.

Ironically, the launch of the Facebook-led project was the match that set a fire to central banks looking into CBDCs in a push to challenge Diem.

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Author: Lujan Odera

Largest Stablecoin, Tether (USDT), is Now Live on Ethereum Scalability Solution, Hermez Network

Largest Stablecoin, Tether (USDT), is Now Live on Ethereum Scalability Solution, Hermez Network

  • The solution will lower the rising gas and transaction fees on Ethereum.
  • Competition for Tether is on the rise.

Tether’s stablecoin, USDT, is now live on Hermez, a scaling solution on Ethereum based on the ZK-rollup solution. Announced on Monday, the move to Ethereum Layer 2 is set to reduce the hiking gas fees, which have been rising as the DeFi and NFT space grew on the blockchain.

Hermez zk-rollup solution launched earlier this year to ease the load on Ethereum. Rollups provide a solution by batching up many transactions into one transaction, reducing the blockchain fees and data storage costs. The key to rollups is the concept of having a small fraction of data on the L2 chain (Hermez) represent all important data on Ethereum.

In this case, every Tether transaction completed, balance, and user accounts on the Hermez rollup will be available on the Ethereum network despite only a fraction of the information being broadcasted on the second-largest blockchain. Hermez leverages the zk-SNARK rollup solution that allows bundling transactions into one single transaction.

Speaking on the move to a nascent layer 2 solution, Paolo Ardoino, Tether’s CTO, said the solution would “solve the issues of scalability and high transactions on the Ethereum network.” Tether became the first stablecoin to launch on Hermez. He added,

“Tether takes its pivotal role in the digital token ecosystem seriously. We’re committed to overcoming technical hurdles while doing our utmost to make manifest the many great projects that developers are working on in our space.”

Tether’s move to Hermez will help free up storage on the blockchain, effectively reducing ETH fees. Data from Ycharts shows that the average fee for a single transaction on ETH is $22, as of writing, locking out users with small amounts of funds from using the platform. Hermez promises over 90% reduction of the average tx fee, which would lower the transaction fee to less than $2.

Tether’s move to Hermez follows the integration of Tether on Polkadot blockchain and Kusama networks earlier this month.

Competition for Tether

The rising gas fees on Ethereum are causing many exchanges and users to move to better solutions and cheaper blockchains. Tron, the 18th largest blockchain, has grown to become the leading competitor to Ethereum on the value of USDT transferred across networks.

Data from Coinmetrics confirms USDT transferred on Tron has reached parity with Ethereum raising concerns for the largest smart contract network.

Tether, which represents about 70% of the total stablecoin market, has significantly grown to a $48 billion market cap placing itself sixth on Coingecko rankings.

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Author: Lujan Odera

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

TrueUSD (TUSD) Stablecoin to Go Live on Tron Network Tomorrow

TrueUSD (TUSD) Stablecoin to Go Live on Tron Network Tomorrow

USD-backed ERC20 stablecoin TrueUSD (TUSD) would launch on Tron’s TRC20 blockchain in two days. This was made known by Tron’s CEO, Justin Sun, via Twitter.

TrueUSD Finally Coming to Tron

TrueUSD’s decision to launch on the Tron network comes barely a month after the stablecoin launched on the Avalanche (AVAX) blockchain, an open-source platform specializing in hosting decentralized finance (DeFi) applications. It currently runs on Avalanche, Binance Smart Chain, and Ethereum.

The company had also disclosed that many other TrustToken products would go live on Avalanche and play a vital role in DeFi applications on the platform.

Created in 2018, TrueUSD is one of the five largest fiat-backed stablecoins by market capitalization. It is one of several stablecoins developed by TrustToken.

TrustToken also offers stablecoins backed by pound sterling, the Hong Kong dollar, the Canadian dollar, and the Australian dollar.

Tron’s TRC‌20 standard is a technical protocol for smart contracts on the Tron blockchain for implementing tokens with the Tron Virtual Machine (TVM).

The Tron Foundation, the Singapore-based non-profit organization that runs the network, had previously said that the TRC20-based USDT would enable interoperability with TRON-based protocols and decentralized applications (dApps) while allowing users to transact and exchange fiat pegged currencies across the Tron Network. TRX 9.41% TRON / USD TRXUSD $ 0.12
$0.019.41%
Volume 6.35 b Change $0.01 Open $0.12 Circulating 71.66 b Market Cap 8.84 b
4 h TrueUSD (TUSD) Stablecoin to Go Live on Tron Network Tomorrow 1 d Tether (USDT) to Become First Stablecoin on Polkadot (DOT) And Kusama (KSM) Network 1 d Bitcoin Takes A Dive & Altcoins’ Drop Hard, But People Are Still ‘HODLing and Not Selling’

TUSD Joins USDt On Tron Blockchain

TrueUSD (TUSD) will be the second dollar-powered stablecoin to run on TRC20 following USDt’s integration.

Tether launched on the Tron network in March 2019 and has since circulated thousands of USDt on the blockchain.

The stablecoin has enjoyed market dominance since its entrance into the market in 2014. Even though alternative stablecoins [like USDC, DAI, BUSD, PAX, & GUSD] have followed since then, it has retained its position as the number one stablecoin due to its first-mover advantage.

Tether was created in response to the growing need among traders to quickly allow movement of funds between different exchanges while benefiting from the USD’s stability. Despite its successes, Tether has had its fair share of criticisms. And it all boils down to its reserves—and whether or not it has enough cash reserves to meet its obligations when needed.

However, in a recent assurance report by accounting network Moore Cayman, Tether proved that it was fully backed by cash reserves, which is sufficient for redeeming all of the circulating USDt.

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Author: Jimmy Aki

MakerDao Proposes D3M to Integrate with AAVE & Expand Stablecoin DAI Across DeFi

MakerDao Proposes D3M to Integrate with AAVE & Expand Stablecoin DAI Across DeFi

The proposal will help MakeDAO gain capital efficiency, make DAI the primary choice for borrowers on Aave, accumulate AAVE, and proliferate DAI across Aave markets on every L2.

MakerDao proposes a Direct Deposit Dai Module (D3M) to join Maker with another DeFi blue-chip lending protocol Aave more closely.

This will allow the Maker protocol to enforce a maximum variable borrow rate on the Aave DAI market.

MakerDAO is the protocol that mints the DAI stablecoin, which has a market cap of $3.19 billion and acts as a hedging tool and medium of exchange directly on-chain.

DAI, USDT, and USDC are the dominant stablecoins in the decentralized finance sector currently, with the lending rate going as high as 10-12% and borrowing rate up to 19%, as per DeFi Rate.

According to the proposal, over-collateralization is the basis of DeFi with more collateral present than the asset minted, providing room for incentivizing a third party to pay back the debt on behalf of borrowers.

And “MakerDAO protocol is heavily overcollateralized,” it states. The proposal further mentions that the protocol has also proved itself to be resilient during the March crash.

The D3M explores an alternative path to bring more liquidity in secondary DAI venues by minting DAI backed by aDAI and a potential new tool to stabilize DAI peg. aDai is an automatically-generated, native token to the Aave protocol issued to a user who supplies DAI into the Aave protocol. AAVE 5.71% Aave / USD AAVEUSD $ 377.85
$21.585.71%
Volume 261.74 m Change $21.58 Open $377.85 Circulating 12.48 m Market Cap 4.71 b
6 h MakerDao Proposes D3M to Integrate with AAVE & Expand Stablecoin DAI Across DeFi 1 d Bitcoin Takes A Dive & Altcoins’ Drop Hard, But People Are Still ‘HODLing and Not Selling’ 1 d Balancer Labs Has ‘Zero’ Involvement in Algorand; V2 Launch is the Sole Focus

According to Sam MacPherson, smart contracts facilitator at Maker (MKR), this will benefit both the protocol. For Aave leverage seekers, it means not getting stuck in a position with double digits interest rates, and for Maker, DAI supply expansion to reduce reliance on USDC.

This proposal will further help Maker attract borrowers, more revenue, expand DAI supply, and if Aave starts a Liquidity Mining program, then collecting AAVE and earning governance rights in it.

The Aave community is deploying new liquidity pools across various L2 solutions, which means more DAI can bridge into pools to transact affordably. Aave can essentially become the distributor for DAI on every L2.

All of this will be achieved by the D3M module mining and directly depositing freshly minted DAI into the Aave V2 protocol.

“The D3M has a target rate for limiting the size of the deposit and ensuring DAI to be the most competitive asset to be borrowed on Aave compared to other stablecoins,” states the proposal.

MakerDAO basically aims to expand its stablecoin across DeFi and ensure its market position amidst the rise of new stablecoins.

“Yet another example of how deeply integrated Maker is across DeFi,” commented Ryan Watkins, a researcher at Messari. “Now becoming a bank for banks.”

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Author: AnTy

French Retail Multinational, Groupe Casino, to Launch Euro-Backed Stablecoin on Tezos

French Retail Multinational, Groupe Casino, to Launch Euro-Backed Stablecoin on Tezos Blockchain

It will be used for payments across the stores, trading, and loyalty rewards.

First reported by French publication Les Echos, Groupe Casino aims to revolutionize payments across its stores with the launch of its Euro-backed stablecoin, Lugh. The multi-billion revenue retail company plans to use stablecoin, ticker EURL, enhance payments, loyalty rewards, and trading in the future.

The stablecoin is created through a partnership with France-based financial service firm, Société Générale, audited by PricewaterhouseCoopers (PwC), the infrastructure provided by Sceme, and offered on the crypto exchange, Coinhouse. According to the report, the stablecoin is developed on the Tezos blockchain (XTZ) by crypto research and development company Nomadic Labs.

However, the stablecoin does not yet represent electronic money, with plans to introduce it to over 11,000 stores across France and Latin America currently underway.

The coin is named after one of the most prominent gods in Irish mythology, Lugh.

Nearly 500,000 EURL tokens will be released exclusively on the regulated crypto exchange, Coinhouse, during the testing phase – the full launch expected later in the year.

The French central bank announced trial phases of a digital Euro, in partnership with Société Générale last October, making it a one of a kind partnership in Europe. Notwithstanding, the central bank governor announced plans to launch a CBDC to keep up with China and other nations that are already launching their own.

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Author: Lujan Odera

Bank of Thailand Declares Terra-based Thai Baht Stablecoin THT Illegal & In Violation of Currency Act

Bank of Thailand Declares Terra-based Thai Baht Stablecoin THT Illegal & In Violation of Currency Act

The Bank of Thailand (BoT) has declared THT, a Baht-pegged stablecoin on Luna-powered Tera, in violation of the Currency Act of 1958, which gives the state exclusive authority to issue money.

Pruettipong Srimachand, Assistant Governor of the Legal Group at the central bank, reported on the development around stablecoins in the private sector.

THT is denominated and valued at one Thai Baht, much like how stablecoin works. As per the document circulating online,

“a new stablecoin, THT, has been created abroad on the Terra Platform… Although THT Is currently not used as a medium of exchange, it could cause fragmentation to the Thai currency system should THT or other similar stablecoins come to replace, substitute, or compete with Baht issued by the ROT.”

The central bank feels the stablecoin could “ultimately” affect the general public’s confidence in the stability of the national currency system.

As such, “any activity involving THT is deemed illegal, as the creation, issuance, usage or circulation of any material or token for money is a violation of Section 9 of the Currency Act 1958,” said the bank in its press release.

The bank also cautioned the public in engaging with the stablecoin and even advised them to “refrain” from participating in any activity involving THT as there are no legal assurances or protection. Users could further be at risk of cyber theft and money laundering, it said.

“A short-sighted move that will primarily harm Thai citizens as the rest of the world keeps innovating,” commented Jake Chervinsky, General Counsel at Compound Finance.

A similar move was made by China in the last quarter of 2020 when the country’s central bank proposed a law that recognizes the renminbi in both physical and digital form but as an exclusive yuan-pegged coin in mainland China.

It proposed prohibiting any other individual or legal entity from issuing or selling fiat-backed tokens to prevent the risk of replacing the circulation of the Renminbi.

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Author: AnTy

New Zealand Digital Asset Firm Launches Country’s First Compliant Stablecoin, $NZD

New Zealand Digital Asset Firm Launches Country’s First Compliant Stablecoin, $NZD

The stablecoin is built on Ethereum leveraging Circle, Coinbase, and Blockchain Labs frameworks. Audit reports on the reserves will be released quarterly, the report states.

Techemynt, a digital asset transaction service, announced the launch of a New Zealand dollar-backed stablecoin, $NZD.

Auckland-born digital asset service provider, Techemynt announced the launch of a New Zealand dollar-backed stablecoin. The Ethereum-based token is fully backed 1:1 with cash and cash equivalents in the firm’s treasury (denominated in New Zealand Dollars).

According to the report, the stablecoin will provide an avenue to digital payments, remittance, arbitrage opportunities across the country. Additionally, $NZD aims to strengthen and stabilize the New Zealand dollar in order to make it “a prominent participant in the global digital asset economy,” it further reads.

Fran Strajnar, Executive Director of Techemynt, said the company partnered with top teams in crypto such as Circle, Coinbase, and Blockchain Labs to successfully deploy $NZD on Ethereum. This will be the first compliant New Zealand dollar-backed stablecoin and will continue to be built “adhering to NZ legal requirements,” he added.

“After nearly a year of development, $NZDs is now first to fully execute and deliver on the promise of bringing a New Zealand Dollar stablecoin to the world.”

To ensure transparency and accountability in issuing the $NZD stablecoins, Techemynt will employ the services of a “leading accounting firm” to provide quarterly audit reports on the state of the reverses to $NZDs issued.

Starting today, the Techemynt $NZD tokens will be distributed directly to customers who wish to acquire $100,000 NZD or more worth of tokens (~$71,300). Users can also acquire coins in the secondary markets through Bittrex owned exchange, Dassetx.com.

However, this is not the first time a New Zealand stablecoin has launched in the markets. Back in 2017, now-defunct crypto exchange, Cryptopia launched its NZDT stablecoin, reported to be backed 1:1 to the New Zealand dollar.

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Author: Lujan Odera

FinClusive Partners With Stellar (XLM) to Enhance Stablecoin Payments Across Institutions

FinClusive Partners With Stellar (XLM) to Enhance Stablecoin Payments Across Institutions

New York-headquartered compliance firm, FinClusive announced a strategic partnership with Stellar USDC on Thursday in a bid to “enable businesses to access and leverage stablecoins instantly while staying compliant.” According to the report, the new alliance will enhance crypto-focused payment innovations while creating confidence among market participants due to compliance checks.

Integrating Stellar USDC gives users (corporations, institutions, banks) a fast, low fee, and convenient channel to complete financial transfers across borders.

FinClusive integrates compliance-as-a-solution (CaaS) to enable financial firms to enhance their financial inclusion products across the globe. The partnership with Stellar to incorporate the second largest stablecoin, USDC, will allow corporations to conveniently and instantly make cross-border payments while staying compliant and minimizing the transaction fees.

“Thanks to USDC, businesses using FinClusive can worry less about enduring prolonged settlement times or fluctuations in the value of their transactions.”

FinClusive selected Stellar USDC over Ethereum’s USDC as the former provides a cheaper platform to transact. Providing low fees and convenience will see the strategic partnership enhance stability and security, accelerating financial inclusion across businesses further.

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Author: Lujan Odera

Canadian Financial Institution Launches World’s First Stablecoin Backed by Bank Deposits

Canadian Financial Institution Launches World’s First Stablecoin Backed by Bank Deposits

  • Canadian-based bank, VersaBank, announced the launch of its digital stablecoin, VCAD, which is backed 1:1 by Canadian dollar bank deposits by the bank.

VersaBank, a North American banking leader in B2B digital payment solutions, announced its plans to launch VCAD, the “world’s first digital currency backed by a North American bank deposits”. The stablecoin aims to offer users a channel of commerce while offering the highest levels of stability and security on its system.

The VCAD stablecoin is as a result of a partnership between VersaBank and Stablecorp, a joint venture between crypto asset manager, 3iQ and Mavenet, a blockchain development firm, both Canadian firms too. The partnership will ensure the commercial launch of VCAD, with VersaVault, a digital bank vault under VersaBank’s cybersecurity subsidiary, DRT Cyber Inc., securely managing the stablecoin.

The VCAD project is expected to launch in the coming months, a statement from the team further stated.

VCAD allows consumers and businesses to leverage the benefits of stable tokens such as removing the wild volatility experienced across the crypto market or fiat currencies. Moreover, users will also enjoy the security of a fully-backed stablecoin through the bank deposits, David Taylor, President of VersaBank and DRT Cyber Inc. said in a statement.

“Consumers and businesses purchasing products and services with VCAD will finally know the precise value of their digital currency when executing these transactions.”

At launch, VCAD will be issued to financial intermediaries working with VersaBank in exchange for Canadian dollar deposits. These partners and intermediaries will then offer the stablecoin directly to users and businesses allowing them to redeem for Canadian dollars and payment purposes at any time. Jean Desgagne, CEO, Stablecorp said,

“VCAD provides consumers with not only the security afforded by an underlying deposit with a Canadian chartered bank but also the comfort of knowing that each VCAD issued or redeemed will always have one-to-one value with the Canadian dollar.”

Stablecoins are rapidly gaining acceptance across Canada as a bank of Canada official, Deputy Governor Tim Lane, praised the innovation over “flawed Bitcoin” as a payment channel.

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Author: Lujan Odera