The volatility of most cryptocurrencies brought about the deployment of stablecoins. These assets are…
The post The best choice of stablecoin: Tether (USDT) vs USD (coins) appeared first on Coin Journal.
The total supply for USDC on Ethereum has surpassed that of Tether, putting USDT in second place on Ethereum for the first time.
Circle’s USD Coin (USDC) has reached a major milestone by surpassing Tether (USDT) in total supply on the Ethereum network.
Tether has been the most popular stablecoin since at least 2016, after originally sharing the market with BitUSD and NuBits (USNBT) stablecoins when it launched in late 2014. At that time, USDT ran on Omni. As the latter two fell into obscurity due to losing their dollar peg and shedding users, USDC emerged in 2018 as a more transparent and more regulated competitor to Tether, which has been under a cloud for years due to doubts over its backing.
Although USDT is still the most popular stablecoin with a total supply of 78.5 billion, nearly 50% of the supply or 38.7 billion tokens, is on the Tron network. USDT can also be found on BSC, Solana, Huobi ECO Chain, Avalanche, Polygon, and 13 other chains or layer 2 solutions.
The current total supply for USDC is 45.7 tokens across 21 chains or layer-two solutions.
Doubts over Tether’s backing has caused its public image to decline over the years. Controversy has plagued the company over how the stablecoin is collateralized and how its reserve funds are managed.
The issuance of two Consolidated Reserves Reports about Tether’s financial reserves from accounting firm Moore Cayman in 2021 did little to quell the doubters. In its latest financial report, Tether revealed that it holds $30.8 billion in unspecific commercial paper in addition to other assets backing USDT.
Circle has been more transparent about its reserves, though not to the extent some critics demand. In Aug. 2021, Coinbase President Emilie Choi said that the USDC reserves backing the second largest stablecoin in the market would shift entirely to cash and US Treasury bonds. This did indeed happen by Oct. 27 2021 according to an Independent Accountant’s Report done by Grant Thornton.
Coinbase is a close partner with Circle, a digital payments service, which helped launch USDC in Oct. 2018. Circle is backed by Bitmain, China Everbright Bank, and eight others.
It has been supportive of efforts to solidify a regulatory framework for all stablecoins. Circle CEO Jeremy Allaire supported a Nov. 2021 Biden Administration proposal to treat stablecoin issuers similarly to banks. Allaire also attended a Congressional hearing with several top crypto industry leaders in Dec. 2021 to discuss policy direction with the Financial Services Committee.
Centralized stablecoins USDT, USDC, and BUSD are currently the top three in their category, however decentralized stablecoin options have begun to proliferate.
TerraUSD (UST) is the fourth largest stablecoin, but is the fastest growing since Nov. 2021. Since then, it has surpassed Magic Internet Money (MIM) and DAI (DAI), and achieved a $10.7 billion market cap.
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.
Hong Kong’s central banking institution, the Hong Kong Monetary Authority (HKMA), released a questionnaire to gauge public opinion on regulations for crypto-assets and stablecoins. The state-backed regulator intends to establish a regulatory framework by 2023-24.
HKMA’s “Discussion Paper on Crypto-assets and Stablecoins” highlights the explosive growth of the stablecoin market in terms of market capitalization since 2020 and the concurrent regulatory recommendations put forth by international regulators including the United States’ Financial Action Task Force (FATF), the Financial Stability Board (FSB) and The Basel Committee on Banking Supervision (BCBS).
According to the HKMA, the current size and trading activity of crypto-assets may not pose an immediate threat to the stability of the global financial system from a systemic point of view. However, the discussion paper warned:
“The growing exposure of institutional investors to such assets as an alternative to or to complement traditional asset classes for trading, lending and borrowing […] indicate growing interconnectedness with the mainstream financial system.”
Based on the above figure, HKMA’s paper shows that the global market capitalization stood at about $150 billion in December 2021, “representing about 5% of the overall crypto-asset market.” The regulator has also 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:
HKMA expects stakeholders to submit their responses by 31st March 2022, and aims “to introduce the new regime no later than 2023/24.”
On an end note, the regulator stated that payment-related stablecoins have a higher potential for being incorporated into the mainstream financial system or even day-to-day commercial and economic activities.
As a result, the HKMA considers expanding the scope of the Payment Systems and Stored Value Facilities Ordinance (PSSVFO), a law that determines the legality of financial products.
Complementing the local government’s pro-crypto intentions, one of Hong Kong’s largest property developers Sun Hung Kai invested $90 million in Sygnum, a Swiss bank dedicated to digital asset holding.
As Cointelegraph reported, the Series B funding round brings Sygnum’s post-money valuation to $800 million, marking a tenfold surge in consolidated revenues from 2021.
The post Hong Kong begins discussions to introduce stablecoin regulatory framework appeared first on CoinRegWatch.
In a Senate Banking Commitee press conference this past Wednesday, Federal Reserve Chair Jerome Powell clarified in response to a question on whether a potential Fed CBDC would preclude the existence of privately-issued stablecoins, to which Powell responded “No, not at all.” Letting stablecoins coexist and compete against a Fed digital dollar has big implications.
The post Jerome Powell softens regulatory stance against stablecoins, says can coexist with the Fed’s CBDC appeared first on CryptoSlate.