The Hong Kong Monetary Authority shared a list of eight questions to seek policy-related recommendations citing five possible regulatory outcomes — no action, opt-in regime, risk-based regime, catch-all regime and blanket ban.
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.
Ark Invest's latest foray into the crypto sector focuses on stablecoin issuer Circle, which announced plans to merge with SPAC Concord Acquisition Corp.7924
Altcoins can rally for an infinite number of reasons, but some price spikes are more historically similar than others.2009
Tether has not issued a statement giving a specific reason for blacklisting three addresses, but it has done so before to comply with law enforcement and aid exchanges after cyber attacks.15288
Hong Kong’s central bank is inviting global stablecoin operators to respond to its proposed rules.2295
The pilot version of China’s official digital yuan wallet app has become the most downloaded app in local mobile app stores.4282
Bahrain’s central bank initially announced its JPM Coin trial in May 2021.6131
The development of an in-house stablecoin was first discovered in the source code of Paypal’s iPhone app by developer Steve Moser.17845
The threat of stablecoin regulation and USDT and USDC centralization are making decentralized stablecoins like MIM, FRAX and UST attractive to DeFi investors.10729
Terra would provide over $139 million in UST and LUNA to several DeFi projects on Ethereum, Solana and Polygon for at least the next six months.13543
The company is pushing new use cases for blockchain payments through its partnerships with Bitso and Stellar Development Foundation.4125
The $4 billion gap between the current decentralized finance TVL and an ATH could be closed using recent implementations from AAVE, Curve and Spell Token.4855
Low-interest rates are making the switch from traditional savings accounts to DeFi more compelling than ever before.17388
In 2021, mainstream U.S. Democrats’ stance on crypto has tipped towards skepticism and preference for tighter regulation.4694
U.S. stablecoin issuers might soon face liquidity, customer protection and asset reserve rules — and maybe even a deposit-insurance mandate like banks.5287