Stablecoin News

One of the hindrances to mainstream cryptocurrency adoption is price volatility, as these assets are freely traded in the open market without central administrators tasked with maintaining price stability. The anticipation of potential losses and gains has hindered cryptocurrency’s use as a medium of exchange. Stablecoins, however, are cryptocurrencies designed to maintain a stable value over time, making them ideal for commercial transactions. 

The introduction of stablecoins in the cryptocurrency market ushered in a new wave of liquidity, as exchanges were able to provide trading pairs with tokens representing traditional fiat currencies. 

Stablecoin design takes many different forms, each with its own tradeoffs: 

  • Reserve-backed stablecoins: Cryptocurrencies pegged to the value of a fiat currency held in reserve by a company or consortium. E.g., Tether (USDT), USD Coin (USDC) and Paxos Standard (PAX). 
  • Collateralized stablecoins: Tokens backed by other cryptocurrencies that retain a one-to-one value with a fiat currency through over-collateralization to absorb potential volatility of the underlying assets. E.g., Dai and BitUSD. 
  • Algorithmic (seigniorage supply) stablecoins: Rather than using a reserve or collateralization to maintain a stable value, these stablecoins are facilitated through an automated expansion and contraction of the monetary supply, emulating the role of central banks in the fiat economy. E.g., Basis.
The new draft law legitimizes digital yuan and may criminalize the issuance of yuan-backed stablecoins by third parties
China's central bank lays regulatory foundation for CBDC
Husayn Hashim
Retail investors are buying into Bitcoin, says CryptoQuant CEO.
Stablecoins went wild in the days before Bitcoin’s recent surge
Michael Kapilkov
Demand for Ethereum-based stablecoins exploded during the third-quarter DeFi bubble, with Dai’s supply growing by more than 600% and USDC expanding 200%.
Yield farming fuels 623% growth in DAI supply to nearly $1B
Samuel Haig
Market Analysis
Data from Wilshire Phoenix suggests BTC price formation is driven by CME Bitcoin futures but would this dynamic differ if stablecoin volumes were also included?
Study finds CME drives Bitcoin price, but it excludes stablecoin volumes
Marcel Pechman
Follow up
The proposed EU crypto market regulation will raise many compliance obstacles for the next Libra-like project seeking to operate in Europe.
Chasing the hottest trends in crypto, the EU works to rein in stablecoins and DeFi
Kirill Bryanov
Stablecoins are taking over the crypto space with increased utility and circulation. What is prompting this growth, and is it a threat to the market?
Stablecoins race ahead: Fiat-backed crypto booming amid uncertainty
Jinia Shawdagor
Talk of CBDCs and Facebook's Libra headlined this week's policy news, as international organizations weigh in on both.
Law Decoded: The rivalry between central banks and global stablecoins, Oct. 9–16
Kollen Post
Power Finance, led by a former PwC partner, plans to launch a New Zealand digital dollar stablecoin early next year.
Former PwC partner to launch New Zealand ‘Power Dollar’ stablecoin
Joshua Mapperson

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