US Banking Regulator FDIC Is Looking into Stablecoins’ Eligibility for its Deposit Insurance

US Banking Regulator FDIC Is Looking into Stablecoins’ Eligibility for its Deposit Insurance

The Federal Deposit Insurance Corp. (FDIC) is studying whether certain stablecoins might be eligible for its coverage. The discussions are only in the preliminary stage yet, reported CoinDesk citing five people familiar with the knowledge.

Reportedly, the agency is analyzing what pass-through FDIC insurance looks like for the reserves stablecoin issuers hold at banks. Such coverage makes the holder of the tokens eligible to be insured by the FDIC up to the standard deposit insurance amount of $250,000.

The agency is further looking into what direct deposit insurance would look like for banks that want to issue stablecoins.

“This is all part of a process by which they are trying to bring stablecoins into the banking system in a responsible manner,” one insider has been quoted as saying. “It depends on what’s backing the stablecoins.”

The insider added that if stablecoins are backed by reserves at the Federal Reserve for cash, then that would be a deposit but not if it’s backed by the Treasury.

Last week came the report that the Biden administration is looking to regulate stablecoin issuers as banks and is prepared to issue a report on them by the end of the month.

As we reported, the BIS also put out a proposal for public consultation this week, which aims to apply the same principles as those followed by the financial market to “systemically important” stablecoins.

Another report on CBDC from BIS earlier this month said significant stablecoin adoption could lead to “excessive market power” and fragmentation in the payments ecosystem.

In an interview with Forbes, former Securities and Exchange Commission (SEC) Chairman Jay Clayton shared his views on whether stablecoins should be considered securities. This is what he has to say:

“A stablecoin that promises $1 back to you, in exchange for the coin, and is backed by cash is one item. Such a coin that is backed by commercial paper, whether it’s 30, 60, or 90 days, sure looks like a money market mutual fund to me. So the second element really looks like a security. We have decided that a pooled vehicle of commercial paper that you use for daily liquidity is a money market mutual fund and should be regulated as such.”

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Author: AnTy

DeFi Stablecoins Record a Surge in Interest Rates, Total Stablecoin Supply Grows 4x in 8 Months

Lending and borrowing rates on DeFi stablecoins keep trending up.

The rates first started going up in late July when the crypto asset prices bottomed and began their recovery.

As crypto-assets started their uptrend, funding rates also gradually increased as traders joined in on the action. This, in turn, helped the interest rates climb up.

Not to mention, ever since the March 2020 crash, the crypto market has skewed towards fiat or stablecoin margin perpetual contracts rather than coin margin ones, amplifying the demand for stablecoins.

Currently, the lending rate for USDT is 5.58% on Compound, 11.53% on Aave, and 3.01% on Cream Finance, while the borrowing rate is 7.41%, 14.52%, and 8.51%, respectively, according to Skew.

Meanwhile, Compound pays a lender 5.39%, Aave 7.87%, Cream Finance 10.53%, and dYdX 1.97% for USDC while to borrow USDC, one is charged an interest rate of 7.18%, 9.72%, 15.49%, and 6.62% respectively.

Meanwhile, the total stablecoin supply has now reached $120 billion, up from less than $30 billion at the beginning of this year.

Tether continues to lead, accounting for just 58.4% of the stablecoin market, followed by USDC’s 23.4%. While USDC has gained a 9% market share, USDT has lost a whopping 16.58% of its market share in 2021.

Besides USDC, BUSD also captured this lost market share from USDT, currently at 10.48%, gaining a 6.77% share. Maker’s DAI also saw some increase, but it wasn’t much as at the beginning of 2021, it was sitting at 4.14%, and about eight months later, it is at about 5.4%.

While USDT is losing its market share, it accounts for the highest volume. In the last 24 hours, USDT did nearly $91.4 billion in trading volume, more than double of Bitcoin’s.

After USDT, Binance’s BUSD has the second-highest trading volume of any stablecoin at $9.6 billion, followed by USDC at $2.86 billion.

USDC, which is developed by Circle – a consortium of Coinbase and Center, is particularly used in the decentralized finance (DeFi)

Recently, Circle said that from September, all the reserves backing USDC would be shifted into cash and short-term U.S. Treasuries, forgoing riskier investments. Back in July, Coinbase ran into criticism over its claim that every USDC was “backed by a dollar in a bank account” when Circle revealed in its report that since May, its reserves had included commercial paper and corporate bonds.

With stablecoins becoming an integral part of the crypto market, it is gaining the attention of regulators.

Stablecoins are at the target of SEC, as explicitly stated by Chairman Gary Gensler several times in the past few months. Gensler had said that stablecoins are embedded in centralized and decentralized exchanges crypto trading and lending platforms and may be used to

“facilitate those seeking to sidestep a host of public policy goals connected to our traditional banking and financial system: anti-money laundering, sanctions, and more.”

Amidst this, the Federal Reserve is considering a digital dollar, but according to Ryan Selkis of Messari, the US should be adopting the stablecoins rather than a “Fedcoin” as central bank digital currencies (CBDCs) will face red tape, poor execution, endless committee meetings, and vague deliverables with untracked results.

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Author: AnTy

Fed Governor: USD Pegged Stablecoins “Broaden The Reach Of US Monetary Policy Rather Than Diminish It”

Fed Governor: USD Pegged Stablecoins “Broaden The Reach Of US Monetary Policy Rather Than Diminish It”

While stablecoins could serve as an attractive payment instrument that could become a major challenger to banks for processing payments, Christopher J. Waller believes, “there are many legal, regulatory, and policy issues that need to be resolved before they can safely proliferate.”

Governor Christopher J. Waller remains skeptical of a Federal Reserve CBDC, which he says is a “solution in search of a problem.”

Speaking at the American Enterprise Institute, Washington, D.C., via webcast, Waller said CBDC won’t be solving any existing problems that are not already being addressed.

While many central banks are considering the adoption of a CBDC as their economies become “cashless,” Waller said eliminating currency is a policy choice and not an economic outcome. Not to mention, Fed Chair Powell has said U.S. currency is not going to be replaced by a CBDC.

The payment system already in place isn’t too limited or slow either to warrant the introduction of a CBDC, he said. While existing interbank payment services have nationwide reach, commercial banks have developed an instant payment service called the Real-Time Payment Service (RTP), and the central bank is creating its own instant payment service FedNow as well, he added.

Waller doesn’t agree with CBDC improving the financial inclusion argument either. He pointed to an FDIC survey showing about 5.4% of US households being unbanked in 2019 and 75% of them were not interested in having a bank account.

“It is implausible to me that developing a CBDC is the simplest, least costly way to reach this 1 percent of households.”

In fact, a CBDC would create additional competition in the market for payment services because that would allow the general public to bypass the commercial banking system, which would then put pressure on them to lower their fees or raise the interest rate to prevent additional deposit outflows, said Waller.

And if commercial banks are earning rents from their market power, then there is a profit opportunity for nonbanks to enter the payment business and offer cheaper services as seen with stablecoins, he said.

“A stablecoin could serve as an attractive payment instrument if it is pegged one-to-one to the dollar and is backed by a safe and liquid pool of assets. If one or more stablecoin arrangements can develop a significant user base, they could become a major challenger to banks for processing payments.”

Such competition from stablecoins could pressure banks to reduce their markup, he added.

But Waller also made it clear that he is not endorsing any stablecoin, and there are many legal, regulatory, and policy issues that need to be resolved first before they can safely proliferate.

Not only is the private sector already developing payment alternatives to compete with the banking system, but innovation in the private sector is also happening quite rapidly, “faster than regulators can process.”

Waller isn’t concerned about private money like stablecoin representing a threat to the Fed for conducting monetary policy either as the USD pegged stablecoins actually “broaden the reach of U.S. monetary policy rather than diminish it,” he said.

“It is well established in international economics that any country that pegs its exchange rate to the U.S. dollar surrenders its domestic monetary policy to the United States and imports U.S. monetary policy. This same logic applies to any entity that pegs its exchange rate to the U.S. dollar.”

Waller also dismissed the argument that CBDC is needed to maintain the primacy of the U.S. dollar because he sees “no reason to expect that the world will flock to a Chinese CBDC or any other.”

Non-Chinese firms, according to him, wouldn’t want to have all of their financial transactions monitored by the Chinese government. Also, the Fed does not need to create a CBDC for the same reason as China, which is to more closely monitor the economic activity of its citizens, he said.

As such, “a CBDC remains a solution in search of a problem,” concluded Waller.

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Author: AnTy

“Tax Private Stablecoins Out Of Existence,” Proposes Latest Fed Paper Ahead Of Treasury Secretary Meeting

“Tax Private Stablecoins Out Of Existence,” Proposes Latest Fed Paper Ahead Of Treasury Secretary Meeting

Written by a Professor of Finance from Yale School of Management and an attorney at the Federal Reserve System, wants regulators to take a lesson from history, the Free Banking Era because the central bank must have a “monopoly on money issuance.”

Before the Treasury Secretary Janet Yellen met with SEC, OCC, and FDIC officials on Monday to discuss stablecoins, a paper called “Taming Wildcat Stablecoins” was released by the Federal Reserve and Yale over the weekend.

Written by Gary Gorton, Professor of Finance at the Yale School of Management, and Jeffery Zhang, an attorney at the Board of Governors of the Federal Reserve System, the paper laid out the regulatory options for US dollar stablecoins and footnote references to Yellen’s upcoming meeting.

According to these authors, while crypto is all the rage, there is “nothing new” about privately produced money, but the difference is its goal to be accepted at par with no questions asked.

They point to history, the Free Banking Era when private money made it hard to track due to fluctuating prices, which were then curtailed by the National Bank Act of 1863. “Subsequent legislation taxed the state-chartered banks’ paper currencies out of existence in favor of a single sovereign currency,” they noted.

Now, Gorton and Zhang propose regulating the issuers of stablecoins like Tether and Facebook’s Diem as banks and the central bank to issue its digital currency (CBDC).

With regulation outpaced by innovation, an uneven playing field has been created that needs to be corrected.

While stablecoins do not appear to be used as money currently, as they evolve further, “the stablecoin world will look increasingly like an unregulated version of the Free Banking Era—a world of wildcat banking,” it adds.

The paper proposed a couple of ways to address this development and wants regulators to “better get going.”

These options include transforming stablecoins into public money by passing new legislation requiring issuers to become FDIC-insured banks or require stablecoins to be backed one-for-one with Treasuries or reserves at the central bank.

CBDC is also proposed as a substitute to privately produced digital money like stablecoin, mainly because the central bank must have a “monopoly on money issuance,” and paper and metal coins won’t be used forever.

With the introduction of a central bank digital currency, the purpose is to have digital fiat and “tax private stablecoins out of existence.”

“Free banking in the US was a failure DUE to state regulation, not despite it,” argued Nic Carter of Castle Island Ventures and co-founder of CoinMetrics.

“The difference between now and then is that blockchain-based assets are more resistant to state capture, being natively digital (compare with gold specie), are more global in nature (compare binance with say, the royal bank of Scotland), and enable a more egalitarian relationship between depositors and depository institutions as the cost of verification is low, and thus the ease of taking ‘physical’ delivery is high. So easier to hold custodians accountable, and the threat of a ‘run’ is higher.”

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Author: AnTy

China Has No Final Date for Launch of e-CNY, the ‘Cash Substitute’ with Smart Contract Feature

Declining use of cash and rapid rise in crypto, especially stablecoins, drove POC’s digital fiat development, which will coexist with physical RMB. In its whitepaper, e-CNY claims to offer anonymity for small value and collects less transaction information than traditional electronic payment unless, of course, “stipulated otherwise in laws and regulations.”

China’s central bank has released the whitepaper of its digital fiat, e-CNY detailing the progress in its research and development. While People’s Bank of China aims to continue the advancement of the pilot in line with its 14th Five-Year Plan, there is “no preset timetable for the final launch” yet.

According to the whitepaper, it is seeking public comments on its digital fiat that is driven by the development of the digital economy, which calls for new retail payment infrastructures.

“As the Chinese economy is shifting from high-speed growth to high-quality development, technological innovation represented by the digital economy has become an important driver of development.”

The bank noted that in China, there is a significant decline in the usage of cash, with the number of transactions done via mobile accounting for 66%, those paid in cash 23%, and cards making up 7%, as per the PBOC survey in 2019.

Also, during the survey period, 46% used no cash.

Besides the foundation of money changing, the “rapid” rise of cryptocurrencies, especially global stablecoins, is another factor driving the need for digital fiat.

Claiming to be decentralized and entirely anonymous, their lack of intrinsic value, acute price fluctuations, low trading efficiencies, and huge energy consumption can hardly serve as currencies used in daily economic activities, wrote the central bank.

As for commercial institutions launching their global stablecoins, it will bring risks and challenges to the international monetary system, monetary policies, and cross-border capital flow management, it added.

The Digital Version of Fiat

“E-CNY is the digital version of fiat currency issued by the PBOC and operated by authorized operators,” notes PBOC as he explains just what exactly is digital fiat.

e-CNY is China’s legal tender with all the basic functions of money, which adopts a centralized management model and a two-tier operational system. This means the right to issue e-CNY belongs to the state with PBOC at the center, which issues e-CNY to authorized operators, which are commercial banks that exchange and circulate e-CNY to the public.

It is simply a “substitute for cash in circulation” and will coexist with physical RMB, which the PBOC will continue to supply as long as there is demand for it, the country’s apex bank wrote.

With e-CNY, the central bank’s objective is to diversify the forms of cash and satisfy the public’s demand for digital cash.

While mainly serving domestic retail payment demands, the PBOCs objective is also to explore the improvement of cross-border payments.

Cross-border payment involves various complicated issues, but “the internationalization of a currency is a natural result of market selection,” it said. Given that e-CNY is “technically ready for cross-border use,” the central bank will explore a cross-border pilot while upholding the principle of having a two-tier and risk-free system “to meet regulatory and compliance requirements of various countries,” it said.

PBOC also claims to offer anonymity in its e-CNY but only for small value and traceable for high value. For this, it will set up a firewall for related information.

“The e-CNY system collects less transaction information than traditional electronic payment and does not provide information to third parties or other government agencies unless stipulated otherwise in laws and regulations.”

The digital fiat also features programmability, deploying smart contracts that don’t impair its monetary functions, enabling self-executing payments according to predefined conditions or terms agreed between two sides.

When it comes to a wallet, there are different types based on the strength of a customer’s personal information, which the PBOC, together with authorized operators and relevant organizations, jointly build, own, and share.

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Author: AnTy

Extreme Right-Wing Groups Using Virtual Assets and Stablecoins to Move Funds: FATF Report

Extreme Right-Wing Groups Using Virtual Assets and Stablecoins to Move Funds: FATF Report

The Financial Action Task Force (FATF) released a report called “Ethnically or Racially Motivated Terrorism Financing” that talks about the use of cryptocurrencies by terrorists to move funds.

The global anti-money laundering watchdog said few countries had designated extreme right-wing groups (ERW) or individuals as terrorists who appear to be becoming more adept at disguising their financial activities.

Some of these ERWs are also using virtual assets like Bitcoin to move funds, according to a new FATF report. Using “so-called privacy coins” meanwhile allows them to maintain anonymity when making transactions. The report said,

“There has been plenty of interest in VAs from different ERW groups and individuals looking for anonymity, especially after being removed from mainstream payment platforms.”

Those who are more security-conscious and looking for a greater level of secrecy “often choose VAs.” However, the agency noted that “there is limited information on the volume of funds being transferred in this way.”

The FATF further points to the use of stablecoins, one created by the group itself “where transactional data only lasted 24 hours before becoming untraceable.” One far-right organization in South Africa created this stablecoin which was managed by an application styled PayApp that “enables the group to use digital money as cash.”

The report also mentions that these groups have property “central” to their fundraising activities as such argues that authorities should target them to deter terrorist financing and disrupt related financial networks.

Additionally, these groups are using concerts, music festivals, mixed martial arts events, and merchandise sales to raise funds, socialize, and network.

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Author: AnTy

Key Fed Official Bullish on Stablecoins, Says it May Support Dollar’s Role in the Global Economy

Key Fed Official Is Bullish on Stablecoins, Says it May Support Dollar’s Role in the Global Economy

Fed’s vice chair for supervision, Randal Quarles, calls for taking “strong account of the potential benefits of stablecoins” while being skeptical about a CBDC, arguing potential benefits of a digital dollar are unclear and can pose considerable risks.

Randal Quarles, the Federal Reserve’s vice chair for supervision, gave a speech on digital money that reflects his bullish views on stablecoins, provided they can be regulated properly while being skeptical about the need for a central bank digital currency (CBDC).

“Stablecoins are an important development that raise difficult questions,” including how their widespread adoption would affect monetary policy or financial stability, commercial banking system, and if they represent a fundamental threat to the government’s role in money creation.

“In my judgment, we do not need to fear stablecoins,” said Quarles at the 113th Annual Utah Bankers Association Convention, Sun Valley, Idaho.

He noted that the central bank has traditionally supported responsible private-sector innovation, and consistent with this tradition,

“we must take strong account of the potential benefits of stablecoins, including the possibility that a U.S. dollar stablecoin might support the role of the dollar in the global economy.”

As for the concern that stablecoins challenge our monetary sovereignty, it is “puzzling” because our existing system depends on private firms creating money every day, he said.

However, there is appropriately a strong regulatory interest in how these fiat-based cryptos are constructed and managed, he added.

The stability risk could arise if the stablecoin is invested in multiple currency denominations, is a fractional rather than full reserve, the pool is invested in illiquid instruments, and the holders don’t have a clear claim on the underlying asset.

“When our concerns have been addressed, we should be saying yes to these products, rather than straining to find ways to say no,” said Quarles.

As for crypto assets like Bitcoin, according to Quarles, they seek to create value in the coin through other means like intrinsic mechanisms to ensure scarcity or anonymity and do not play a significant role in today’s payments or monetary system.

As per him, unlike gold, which has industrial uses and aesthetic attributes, bitcoin’s principal additional attractions are its novelty and its anonymity, and while anonymity will make it the target for increasingly comprehensive scrutiny from law enforcement, the novelty is a rapidly wasting asset.

“Bitcoin and its ilk will, accordingly, almost certainly remain a risky and speculative investment rather than a revolutionary means of payment, and they are therefore highly unlikely to affect the role of the U.S. dollar,” said Quarles.

Besides stablecoins and crypto-assets not being a threat to the financial system and as such do not require a response with a CBDC, Quarles said already the general public transact mostly in digital dollars.

Also, the Fed and private-sector interbank payment services already offer an array of options that facilitate efficient, electronic US dollar payments.

Overall, the US dollar payment system is “very good, and it is getting better,” and the potential benefits of a CBDC are unclear, and it could pose considerable risks, he concluded.

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Author: AnTy

Citigroup’s Richest Clients Can Now Trade Crypto; Also Helps Invest in Stablecoins, NFTs, & CBDC

Citigroup’s Richest Clients Can Now Trade Crypto; Also Helps Invest in Stablecoins, NFTs, & CBDC

Citigroup is finally coming around on cryptocurrencies.

The Wall Street giant now allows its richest clients to bet on crypto as part of a new digital assets group inside its wealth management unit.

This wealth management unit has been in the works ever since Citigroup formed the division earlier this year, and more recently, it has been focused on building out a series of wealth management hubs across Europe and Asia.

Under Citigroup’s crypto plan, the new group will help clients invest in cryptocurrencies, stablecoin, non-fungible tokens (NFTs), and central bank digital currencies (CBDCs), according to the memo.

The new effort will be led by Alex Kriete and Greg Girasole, who will serve as liaisons to “all other business groups at Citi who are expanding into this rapidly emerging space also.”

“They will be responsible for developing our future product capabilities, client delivery mechanisms, and thought leadership around all digital assets,” said Iain Armitage, Citigroup’s global head of capital markets for its private bank, and Rob Jasminski, who oversees the bank’s investment management arm globally, in the memo.

The bank is forming the unit as investor demand for crypto assets continues to soar and its rivals like Goldman Sachs and Morgan Stanley also start offering crypto-related services to their clients.

The newly formed unit comes just weeks after the CEOs of the six biggest US banks were grilled by Congress over their ties to cryptocurrencies. At the time, Citigroup chief executive Jane Fraser said her bank was taking tentative steps in the crypto space.

“We proceed with great caution here,” Fraser said.

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Author: AnTy

SEC Commissioner Hester Peirce: Stablecoins May Be USA’s Answer to China’s Digital Yuan

SEC Commissioner Hester Peirce: Stablecoins May Be USA’s Answer to China’s Digital Yuan

Meanwhile, the Fed Chair is in no rush to issue a digital dollar either as the focus is on doing it right than doing it fast.

China’s digital yuan will not overthrow the dollar’s reign, said a top US Securities and Exchange Commission official (SEC). And this is because of the growth of dollar-backed stablecoins.

Central banks around the world are working on the digitized version of their fiat currency with an aim to improve the payments system.

The People’s Bank of China (PBOC) is leading this race of a central bank digital currency (CBDC) as it extends the trials of digital yuan to more cities and even across borders in Hong Kong.

This fast pace of China has some worried that the yuan could gain dominance over the dollar, the world’s leading reserve currency. But according to Hester Peirce, aka “Crypto Mom,” the rise of stablecoins wouldn’t let that happen. she said,

“Even in 2021, there’s been a tremendous growth in stablecoins – these are essentially private digital dollars.”

“That, effectively, may be our answer to the Chinese CBDC (central bank digital currency). It may be just private stablecoins.”

“If they’re dollar-backed, then I think that the dollar will still be quite relevant,” said Peirce during a digital currency event.

According to the International Monetary Fund, the dollar accounted for almost 60% of the world’s official foreign exchange reserves at the end of 2020, while China’s share is just 2.25%.

Stablecoins, meanwhile, are on their way to surpass $100 million in market cap, with Tether the dominant stablecoin has a market cap of $51 billion alone, which is managing over $20 billion in trading volume every day. Tether’s on-chain volume has reached $754 billion YTD, already 2% higher than the total volume transacted in 2020, per IntoTheBlock.

On the topic of a digital dollar, Federal Reserve Chairman Jerome Powell said this week that China’s digital yuan plans wouldn’t push them to rush its own CBDC plans, adding that China’s approach won’t work in the US.

“It is far more important to get it right than it is to do it fast,” Powell said.

“The currency that is being used in China is not one that would work here. It’s one that really allows the government to see every payment for which it is used in real time.”

The US central bank is taking its time to understand digital currencies, he said. “Central bank digital currencies are now possible,” Powell said.

“We need to understand whether that is something that would be a good thing for the people that we serve.”

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Author: AnTy

Fei Stablecoin’s ‘Protocol Controlled Value’ Penalizes Those Wanting Their ETH Back

Fei Stablecoin’s ‘Protocol Controlled Value’ Penalizes Those Wanting Their ETH Back

The project’s genesis was a success with 639,000 ETH committed and $1.3 billion FEI minted. But with little demand for FEI right now, people are running for the exit, which has consequences.

Fei Labs, the firm behind the new stablecoin project Fei Protocol, raised 639,000 ETH for its token generation event and minted $1.3 billion FEI.

The firm shared over the weekend that more than 17,000 unique addresses participated in the event, which can now redeem FEI and the project’s proposed governance token TRIBE, based on the ETH committed.

The event led the FEI-ETH pair to become the largest pool Uniswap on Saturday, and the pre-swap of $385 million FEI for TRIBE was probably the largest ever AMM swap, said the Fei Labs.

Liquidity on the largest DEX, Uniswap, also went past $8 billion on April 4th, up from $5.35 billion at the beginning of the month, thanks to this.

The project’s official website mentions Coinbase, Andressen Horowitz, Nascent, Framework, Variant, and Buckley Ventures as its investors.

Demand for stablecoins continues to rise, and in the DeFi ecosystem, they have become a staple. But the most popular ones, fiat-collateralized USDT and USDC, have a critical flaw of being centrally controlled while crypto-collateralized DAI has scalability issues, said the team in its introduction of the project earlier this year.

As such, the stablecoin FEI uses a “Protocol Controlled Value” to maintain its $1 peg. Currently, it is at $0.948, as per CoinGecko. The governance token is meanwhile trading at $2, down from the opening price of $3.18.

image2

Source: @jonwu_

In the experimental stability mechanisms to maintain its peg, Fei uses direct incentives, which are seen as a fairer and more capital efficient and decentralized approach to managing the stablecoin.

Here, both trading activity and usage of the stablecoin are incentivized where rewards and penalties drive the price towards the peg. The team says,

“FEI’s stability mechanisms are geared towards long-term holding. TRIBE governance is responsible for the peg and can adjust the incentives above as needed.”

The community, however, isn’t really confident of the project’s choice of innovation with the mechanism. Jon Wu noted,

“You thought you were buying a dollar for 50 cents, but instead, you paid $1.01 only to get $0.95, and now if you try to sell it, you’ll end up with $0.60.”

image1

Source: @SamKazemian

Messari’s Ryan Watkins said,

“The issue with FEI right now is most people want to sell it back for ETH, but doing so incurs extreme penalties. Eventually, Fei will re-weight to bring FEI back to its peg, but then what? There’s little real demand for FEI, and most are still running for the exits.”

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Author: AnTy