Celo Dollar (cUSD) Stablecoin Launches as the Libra Rival Eyes Digital Ecosystem Dominance

Celo Dollars (cUSD) stablecoins are now live on the platform’s mainnet according to a medium post by the foundation on June 29. This comes barely two months since Celo’s mainnet went live; the project has been making aggressive moves in both development and community growth. With Celo’s stablecoin (cUSD) now accessible, the foundation is optimistic that its vision of an all-inclusive financial ecosystem will be realized.

Notably, Celo’s infrastructure has been gaining popularity as its Alliance membership surged following its debut in March with an initial 50 members. Two months in, the number had grown to 75 as more players collaborate to expand Celo’s ecosystem. Prominent names contributing to this project include Bison Trails, Alpha Wallet, Paxful, Polychain, and Mercy Corps, to mention a few. Currently, the Alliance’s focus is in four areas; communications, policy, remittances, and international aid.

The Celo Dollar (cUSD)

As cryptocurrencies take the center stage of digital asset innovation, programmable money is a no brainer for today’s economy. It is, therefore, not surprising that the digital currency trend has been resilient since Bitcoin recorded ATH back in 2017. Consequently, crypto market players have come up with ways to eliminate some aspects of volatility hence the rise of stablecoins over the course of 2019.

Celo Dollar (cUSD) is designed to further enhance the grown of $34 billion P2P markets, $1.4 trillion PoS market, $248 billion gig economy, and $87 billion remittance market. Users can leverage the cUSD to make touchless merchant payments in the wake of COVID-19 preventive measures. They can also send or receive Celo Dollars locally and internationally at friendly fees that are as low as $0.01.

Finally, this Celo based stablecoin can be used to access financing by borrowing at interest. This is especially valuable in economies with a high unbanked population given the increase in smartphone accessibility hence the opportunity to operate on Celo’s network instead.

Celo’s Prospects

The Celo Alliance is considered a Libra rival in the digital currency space but may soon be in the clear should regulatory pressures favor its existence. It has been making significant milestones since we began 2020, including a $700k grant allocation to startups building on the Celo blockchain network. cLabs, Celo’s founding company, also raised $10 million in the Celo Gold (cGLD) token sale on CoinList in which around 509 global investors participated.

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Author: Edwin Munyui

Advancing Dollar Will Fuel Demand for Tether, Which is on Track to be 2nd Largest Crypto

  • Bitcoin is currently trading around $9,650 and the rapidly increasing market capitalization of stablecoins supports the bitcoin price.
  • Major stablecoins were launched in 2018 but it was over the past year that their market capitalization grew 2 to 3 times. During this one year period, stablecoins added more than $5 billion in total market value.

Earlier in 2020, the demand for stablecoins was pushed higher as traders sought stability while digital currencies were declining considerably following the COVID-19 sell-off. While Bitcoin and Ether suffered huge losses, demand for stablecoins only went higher.

The strengthening dollar also supports stablecoins. According to the Bloomberg Crypto Outlook report published in June, “the advancing dollar will fuel demand for the Tether stablecoin.”

Dollar is depreciating in terms of Bitcoin and gold but enjoying an uptrend against most other currencies.

“The greenback appears best positioned as global currency values recede, with all facing unlimited supply.”

These dollar-pegged stablecoins are gaining traction as vehicles for dollar exposure without intermediaries. Also, they are increasingly being used for transferring value among the crypto assets.

Currencies Going Digital

The rapidly increasing market capitalization of stablecoins also indicates that fiat currencies are going digital. COVID-19 actually hastened the shift away from paper money. Besides the risk of spreading diseases, central bank’s quantitative easing to mitigate the effect of the pandemic on the economy is helping in this shift to digital currencies. Bloomberg states,

“We can’t help but draw parallels to the adoption of paper currencies throughout history as the world today moves rapidly toward digitization.”

Tether on Track to be No. 2

This past week, the total market cap across the leading stablecoins reached an all-time high of over $10 billion, up from $4 billion a year ago. Nearly all major stablecoins are ERC20 tokens.

Interestingly, Tether alone accounts for $9.65 billion of market cap, as per Messari.

The largest stablecoin has already taken over third position from XRP quite a few times. According to Bloomberg, it is on track to be number 2 behind bitcoin. Ethereum’s market cap is nearly 3 times that of Tether.

“Absent an unlikely reversal in predominant crypto trends, it should be a matter of time until Tether passes Ethereum to take the No. 2 spot in total assets behind Bitcoin.”

USDT is benefitting from widespread adoption “with a viable case as a proxy for the world’s reserve currency.” And there seems to be little stopping the increasing adoption of the USD-pegged coin.

In May, BTC trading into USDT decreased by 7% but still represents the majority of BTC traded into stablecoins at ~98%.

Recently, on June 2nd, Tether also saw its biggest network activity ever with 133.25k addresses active, 37.29k new addresses created, and 66.89k addresses transferring out all their tokens, as per IntoTheBlock.

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Author: AnTy

4 Million Dai Stablecoins Minted with wBTC; DeFi Gains A Boost from Bitcoin’s Liquidity

MakerDao, Ethereum’s largest DeFi, has facilitated the minting of over 4 million Dai stablecoins based on its newly added synthetic Bitcoin, wBTC.

This transaction was initiated by Nexo, a crypto lending platform, on May 20. It has since signaled the market demand for BTC’s liquidity within Ethereum’s DeFi ecosystem.

Earlier in May, we reported the addition of wBTC as collateral for DAI tokens following a vote by MakerDao’s community. This digital asset has since joined the likes of USDC, BAT, and ETH which were already forms of collateral within the Maker protocol.

Barely a month into its integration, the 1:1 Bitcoin backed, wBTC, is already doing record numbers in the $1 billion DeFi market.

Dai Minting With wBTC

wBTC is an ERC-20 token created once an interested party has deposited Bitcoin with BitGo, which acts as the custodian. It can then be used to stake collateral on the Maker Protocol and borrow Dai stablecoins.

The idea is to scale exposure of DAI loans through the market’s most liquid digital asset. Rune Christensen, the founder of MakerDAO, noted on twitter that there is indeed a market demand for non-ETH assets on DeFi platforms:

“It’s the beginning of a broader trend of DeFi acting as an economic vacuum that will eventually attract almost all value to the Ethereum blockchain.”

According to DeFi Pulse, the wBTC market cap has already hit $21.7 million, having been in operation since January 2019. The initial minting, however, took place as recent as May 11 on Coinlist, where Nexo minted 999.6 wBTC. The Dai stablecoin generated from wBTC could be used for varied purposes such as interest-based lending.

BTC Liquidity in Ethereum DeFi’s

The idea of BTC in Maker’s Protocol was considered for some time but obtained precedence when ETH’s price plummeted on March 12. Though the whole market had taken a hit, ETH’s flash crash raised significant concerns within the maker community. At the time, they considered adding more stablecoins, bitcoin and tokenized gold as alternative collaterals.

Following this discussion, Maker included the USDC to reduce Dai’s issues related to U.S dollar fluctuations. It was not long after that they announced the wBTC collateral in a bid to integrate with Bitcoin’s liquidity. Currently, wBTC enjoys a first-mover advantage into the DeFi ecosystem although other players like tBTC are set to put up a challenge.

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Author: Edwin Munyui

Stablecoin Printer Goes Brrr… Signaling an Early Bull Run in the Crypto Market?

During the past few months, stablecoins have seen immense growth which has led the total issued stablecoins surpassing $10 billion last week and their free float supply exceeded this figure this week.

According to analyst Permabull Niño, this surge in stablecoin supply might be giving off some signals.

He points out how during the 2017 bull run, there was “extremely active printing” of stablecoins. During the bear market of 2018, this printing “flatlined” only to have semi-regular new supply during the chopping of 2019.

Now, in 2020, USD-pegged stablecoins’ printing is “picking up steam” which could signal that we are in an “early bull” market.

Total Stablecoin Supply 7-day % Change, BTC market cap

Tether accounts for 90% of total stablecoin supply

Most of this stablecoin growth comes from Tether (USDT), the popular USD-pegged coin accounts for about 90% of the total stablecoin supply.

As per Tether’s transparency page, more than $9 billion worth of USDT is currently in supply, out of which $5.7 billion are on Ethereum blockchain, $2.1 on Tron blockchain, $1.3 billion on Omni blockchain, and the rest on others like EOS, Liquid, and Algorand.

Tether’s largest markets by traded volume are Asia-based Binance and Huobi. According to a recent Coin Metrics report, USDT-ETH transfers are concentrated during Asian and European market hours.

“Stablecoins are a crucial part of the crypto ecosystem, and will only keep growing in prominence,” states the report.

Since the Black Thursday crash, while most non-stablecoin assets saw a drop in their market capitalization, stablecoins have experienced a surge in demand.

This demand could be from the increase in the number of investors holding stablecoins as “dry powder” in anticipation of a new bull run or Asian OTC traders pouring money into stablecoins, as an onramp to crypto markets or a general rush to safety.

It is also speculated this surge in demand could be a reaction to the shortage of US dollars.

US Dollar shortage

In a 2019 Asian Development trade finance curve, banks from about 50 different countries when asked about the largest barriers to expanding trade financing operations, 30% identified US dollar liquidity as the obstacle.

The global reserve currency US dollar is the lifeblood of international trade as “a lot of borrowing and commerce and investing is done in dollars.” And they have been running in shortage amidst the coronavirus pandemic that has wrecked the businesses and economies.

The US Federal Reserve expanded its balance sheet by more than $2 trillion since the February end. But this is tackling America’s shortage of the US dollar, not the world’s.

Out of this $2 trillion, only about $600 billion was for new emergency loans to address the global shortage of dollars.

Foreign central banks also borrowed over $200 billion from the Fed via swap lines by the end of March. At that time, the Fed allowed them to swap any Treasury securities they held in exchange for cash.

The Importance of the US dollar can be understood from the fact that “when you have a dollar crunch, it can turn a recession or contraction in activity into a financial crisis very quickly because the dollar shortage can trigger defaults and deleveraging,” Julia Coronado, a former Fed economist told Bloomberg.

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Author: AnTy

Stablecoin Popularity Grows As Their Value Transfers On Ethereum Blockchain Surpasses ETH

Most of the value in Ethereum blockchain is now being transferred using stablecoins rather than the blockchain’s native cryptocurrency, Ether. A fresh analysis by Messari indicate that stablecoins are now more popular on the Ethereum blockchain than Ether.

While Ethereum boasts of its native cryptocurrency, Ether, there are various tokens which have been developed on the network. Most of these tokens are stablecoins which can be said to be digital assets which are pegged to the rate of a different currencies such as the euro, GB pound as well as the US dollar or precious metals like gold.

Previously most of the value that was being passed on Ethereum has been through Ether. However, stablecoins have now overtaken Ether. This has been partly due to the popularity of Tether which is pegged on the US dollar.

Commenting on the current research, Ryan Watkins an analyst working with Messari, said in a tweet,

Tether is also available on Bitcoin Omni layer, however, the firm is responsible for this started moving the Tether tokens to Ethereum last year in April. This led the volume of Tether within the Bitcoin platform to decline drastically. In the recent past, Tether was made available in Tron blockchain and today there is lots of USDT on the platform.

Last year in November, CoinMetrics, a data analysis firm, stated that the volume of Tether transfers within the Ethereum platform were almost three times higher than those of Ether transfers.

The high level of Tether activity within the Ethereum blockchain had began to clog the network. However, miners were able to adapt fast through adding the block sizes and now the network is stable and working seamlessly. However, if Tether activities continue rising, there are reasons for future concerns about the network, Decrypt reports.

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Author: Joseph Kibe

Crypto Asset Broker Voyager Adds Three Interest-Earning Stablecoins; USDT, USDC, TUSD

Voyager Digital, the cryptocurrency brokerage company has just registered three new stablecoins. While making the announcement on Wednesday, the company also mentioned that it would soon make it possible for its clients to earn interest in their crypto assets.

The company stated that its support of true USD (TUSD), USD Coin (USDC), and tether (USDT), meant that its clients were now better placed to fund their trading accounts as well as get to manage risks without having to visit a banking institution.

Stephen Ehrlich On the New Listing

Voyager CEO and co-founder Stephen Ehrlich spoke about these new listings and had the following to say about them:

“Adding these three new stablecoins to our platform gives our customers an alternative funding mechanism and another means to hedge their risk in the crypto market.”

The cryptocurrency brokerage company makes it possible for both its institutional and retail traders to engage in commission-free trading activities on various crypto exchange platforms. Investors can use a single account when trading.

According to the company spokesperson, Voyager has invested in the latest tech innovations meant to ensure that their clients get access to the best crypto prices available. The company is able to earn money by taking a spread from trading orders that have been finished at better closing levels than when the trading submissions were made.

Stephen Ehrlich was formerly the E*Trade Chief Executive Officer. He started Voyager together with the former CTO of Uber, Oscar Salazar during the summer season of 2018. Voyager started to offer interest on three percent APR on BTC at the start of November 2019. This was after it has acquired Ethos, the wallet startup sometime in early 2019.

While still on the new listings, Stephen Ehrlich went on to note that:

“Voyager customers will also be able to earn interest on these stablecoins, giving them another way to grow wealth in the crypto industry.”

Withdrawals and deposits for the three newly registered stablecoins began officially on Wednesday, 15th January 2020. It’s expected that clients will start to earn interest on their holdings as from 1st February.

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Author: Daniel W

Crypto Payment Processor BitPay Adds 3 Stablecoins For Merchants; GUSD, PAX, And USDC

  • The three stablecoins added are USDC, GUSD, and PAX.
  • The use of stablecoins provides businesses and consumers with the ability to transact immediately with the security of a blockchain ledger.

The largest provider of blockchain payment services, BitPay, is expanding their reach into cryptocurrency. According to a recent press release shared with us by BitPay, the provider will now be offering stablecoin payments, benefiting consumers and merchants around the world. The three stablecoins that the company will be supporting with their settlements and services include the USD Coin by Circle (USDC), the Gemini Dollar (GUSD), and the Paxos Standard Token (PAX).

Along with these tokens, consumers can both spend the stablecoins around the world and transact with the speed of cryptocurrency, submitting payments to businesses, friends, family, and others. Any wallet-to-wallet transfer with this crypto asset can be spent as soon as it is received, which means that consumers won’t have to deal with the cost or delay associated typically with bank transfers.

In recent years, due to how efficient cryptocurrency has become to transact, the use of USDC, PAX, and GUSD has increased. By simply being pegged to an unchanging asset, the stability has given renewed confidence to consumers in the industry, only amplified by being validated on a decentralized network. Being hosted on an immutable public ledger offers transparency in this market, while reducing the risk of payment fraud. Stephen Pair, the co-founder and CEO of BitPay, stated,

“Accepting or paying with stablecoins opens up new possibilities for global businesses that require the stability of the dollar but the security and efficiency of blockchain payments. Businesses can invoice international customers without the need for costly, complicated cross-border wire transfers. Customers can send and receive payments using fast, efficient, and volatility-free dollar-pegged stablecoins.”

The managing director of financial operation for Gemini, Joshua Rawlins, weighed in on this new development as well. He remarked,

“The pairing of crypto payment acceptance with a stablecoin like the Gemini dollar— which combines the creditworthiness and price stability of the U.S. dollar with blockchain technology —is powerful. Merchants benefit from faster, cheaper, and fraud-resistant payment settlement and consumers benefit from the ease of using cryptocurrency without worrying about price fluctuations.”

Walter Hessert of Paxos added that the use of PAX allows customers to quickly send their payments, and allows retailers to receive those funds instantly, which he feels is “a crucial step.”

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Author: Krystle M

Lawmakers Considering to Classify Stablecoins as Securities

Stablecoins may became a security, if lawmakers’ efforts are successful. Garcia and Gooden presented their bill to the House Financial Services Committee at the end of November, and spoke at a committee hearing on the topic of big data in the financial industry. The bill, titled “Managed Stablecoins are Securities Act of 2019,” makes it pretty clear by the title the bill’s intentions. According to a report by Cointelegraph, Garcia reportedly stated that Facebook’s stablecoin and other such coins are “clearly securities under existing law.” She further indicated that the legislation clarifies an already-existing statute and that by removing the ambiguity, the regulatory structure of the digital assets will protect consumers and ensure proper government oversight going forward.

Gooden appears to share Garcia’s sentiments. He also sponsored the bill and indicated that Congress has a responsibility to clarify the regulatory framework applicable to stablecoins. According to the Cointelegraph report, Gooden reportedly stated that investors need to know on a daily basis that they can trust issuers behind financial assets, and that the bill will provide them with the security they deserve by applying laws that are used to regulate financial securities to the digital currencies.

Reportedly, David Marcus, who is the head of Facebook’s involvement in the Libra project, reportedly shared with reporters earlier this week that the company strongly believes that the Libra coin is not a security and it has good legal opinion that confirms the view of the outside counsels that the company has consulted.

At this point, the project is in its early stages, and Zuckerberg reportedly stated that “I actually don’t know if Libra is going to work.”

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Author: Hank Klinger

World Economic Forum States That Stablecoins Could Temper US Dollar Domination Risk

  • Stablecoins are pegged directly to a specific asset, which could inherently increase domination of the dollar.
  • The debt of the US rose “to levels not seen since the Second World War” with the 2008 crisis.

Stablecoins are cryptocurrency assets with their value tied to a specific asset, like gold or the US dollar. They serve many purposes in the industry, but an opinion piece in the World Economic Forum states that they may be able to curb the potential threat of global foreign currency reserves domination of the US dollar. This suggestion was made by John Liu (Fusion Foundation) and Peter Lyons (Lapa Capital) in an article published on November 26th.

The Fusion Foundation focuses their non-profit efforts on the development of blockchain technology’s infrastructure, for the purpose of decentralized global finance. Lapa Capital, on the other hand, focuses on tech-related investments and is based in New York.

Both Liu and Lyons have pushed to maximize the potential of stablecoins to create a more “sustainable, inclusive, and resilient global system” for investments and trading, as well as banking and payments. The authors shed light on the fact that, of all foreign reserves that are presently held at central banks, the dollar accounts for 62%, based on data from IMF for Q1 2019.

The domination of the dollar has pushed along the systemic threats that have been seen since the financial crisis in 2008. Back then, the investors around the world clamored around the “safe” assets, which were also based in the dollar, which created a massive liquidity crunch around the world.

Even as the authors overlooked the risks, as small as they could be, locking up the USD reserves within bonds for the government just prolonged the skewed economy around the world. As a result, US interest rates remained low, while the debt rose “to levels not seen since the Second World War.” The authors added, “A global scarcity of USD creates major headwinds for US exporters, widening the trade deficit and pressuring economic growth.”

Mark Carney, the governor of the Bank of England has continually argued that having a diverse digital currency would reduce the need that the world has to rely on the dollar, and it could even function as a new currency for international reserves. This type of stablecoin would, in an ideal world, be weighted in multiple currencies, like the yen, the British pound, the euro, and the dollar.

The main point of the article by Liu and Lyons is that the development of stablecoins must prioritize blockchain interoperability if there’s any chance of diversifying the source of global liquidity. In doing so, trade flows can effectively be balanced. If a stablecoin fails, regardless of whether it is privately issued or issued by a central bank, there’s a risk of it simply taking the place of the dollar’s dominance, but with a digital body.

Benoit Coeure, a board member of the European Central Bank, stated that global stablecoins remain untested, which leaves the possibility of threatening the “autonomy and resilience of European payments system.” Right now, the ECB is considering their own launch of a central bank digital currency, though they are still focusing on the impact that such an asset could have on the currency intermediation of the financial sector.

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Author: Krystle M

EU Will Opt Against Issuing Stablecoins, Instead Choosing to Regulate Existing Stablecoins

  • Stablecoins are digital assets that are pegged directly to a currency or commodity.
  • The EU is expected to approve the new declaration on stablecoins by December 5th.

Stablecoins are one of the most consistent assets of the cryptocurrency industry, and there have already been many countries and companies to come out with their own versions. While the idea of having an asset pegged to an asset is appealing to some, the European Union is notably setting themselves apart. While the EU isn’t launching their own stablecoin, they have decided to look at how to regulate these assets.

A group of individuals within the EU presidency is working to develop their own guidance on regulating stablecoins, according to someone familiar with the matter who spoke with CoinDesk. The story was originally reported by Reuters, and the declaration will specifically state that the EU should regulate stablecoins.

The source told CoinDesk, “This is a rather short declaration that is about the EU position on how to handle those new types of cryptocurrencies,” the source told CoinDesk. “The focus is on how those cryptocurrencies should be regulated.”

This declaration is meant to come in response to the launch of Libra by Facebook. Even with many regulatory concerns, Libra hasn’t slowed or stopped the progress on their goal of launching next year. The governing council for the asset formally signing onto the project in October. While the declaration expresses the need to regulate stablecoins, it doesn’t state that the EU should create its own cryptocurrency in response. Instead, according to the source, the idea of launching a stablecoin is more of an idea that “should be explored,” though there’s no indication right now that the EU is going to explore it.

The source added, “The statement is to highlight the need for a proper regulatory framework for those stablecoins and as a consequence, different ideas should be explored. One of them is the possibility of having something that is managed by the ECB [European Central Bank] and other central banks.”

At this point, a summary on what the final declaration will say isn’t something that the source feels confident in speaking to. However, on November 8th, the statement will be officially finalized before being presented to the finance ministers of the EU. However, the EU is expected to adopt the declaration on December 5th, which is the next meeting of the finance ministers, says the source.

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Author: Krystle M