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Ripple's development team is launching an engineering preview for an upgrade to the XRP Ledger (XRPL) that will enable "federated sidechains." Ripple says these sidechains could unleash decentralized finance (DeFi) and smart contracts across the broader XRP ecosystem without decreasing XRPL's efficiency. Each sidechain acts as its own blockchain, while federation enables value in the form of XRP and other tokens to move efficiently from the sidechain to the Mainnet, without compromising the speed, efficiency, and throughput of the public XRPL Mainnet.

Sidechains are a unique and diverse solution for disparate blockchain networks to experiment and interact with each other. Developments within sidechains will go a long way in fueling better liquidity, interoperability, and scalability of the broader blockchain and cryptocurrency ecosystem.

"Enabling Blockchain Innovations with Pegged Sidechains" was viewed as a death blow for Altcoins. However, the type of sidechain outlined in the white paper has not materialized. Why not?

While trustless sidechains on Bitcoin may still be quite a few years away, there are other layer-two protocols, such as federated sidechains and the Lightning Network, that allow Bitcoin to gain the features of the most popular altcoins right now - albeit usually with security trade-offs. These additional protocol layers will likely become relatively trustless eventually, as advancements in cryptography are made over time.

Ripple will add smart contracts to the XRP Ledger (XRPL) developer ecosystem and XRPL mainnet, although it's still in its research phase and the firm did not provide a definite time frame for deployment. It also invited programmers familiar with Ethereum virtual machine (EVM) languages to explore possibilities on its sidechain. Ripple also said the sidechain was created for developers using Ethereum-based smart contracts. This gives a familiar environment for deploying DApps, allowing them to use Solidity, a programming language used to build smart contracts on Ethereum. https://ripple.com/insights/expanding-programmability-on-the-xrp-ledger/

Ripple is proposing a major XRP ledger upgrade that the company says could unleash decentralized finance (DeFi) and smart contracts across the broader XRP ecosystem without decreasing XRPL's efficiency. Ripple plans to accomplish this through the use of federated sidechains, according David Schwartz, the company's chief technology officer.

Working with wallet provider Blockchain and precious medal trader MKS (Switzerland) SA, Coinshares announced a gold-backed network for trading tokens representing digitized physical gold. The network launches with more than $20 million in gold held in a Swiss vault to back up its tokens. Each DGLD token is backed by 1/10th troy ounce.

The Wyoming State Banking Board voted 8-0 to grant Avanti Bank & Trust a bank charter. Avanti's approved business plan includes a tokenized U.S. dollar called Avit™*; custody services for digital assets as a "qualified custodian" under the Investment Advisers Act; API-based online banking services, where customer deposits must be 100% backed by reserves; and prime services for digital assets. Avanti plans to provide commercial accounts in early 2021 and other accounts with high minimum balance requirements soon thereafter. Avit will initially be issued on Liquid (a sidechain of the Bitcoin blockchain, in coordination with Blockstream) and Ethereum.

Di Gang, Deputy Director of the PBOC Digital Currency Research Institute, reportedly said the central bank is exploring using distributed ledger technology (DLT) at the e-CNY issuance layer. Until now, the PBOC has been working with a centralized ledger technology approach because of DLT's immaturity, performance, and scalability challenges. However, he acknowledged that perhaps these can be addressed using sidechains, multichain architectures and hardware acceleration.

The President of El Salvador reportedly announced that the El Salvador government will issue a $1 billion "Bitcoin Bond" on the Blockstream Liquid sidechain network. To facilitate the process, El Salvador's government is working on a securities law, and the first license to operate an exchange would go to Bitfinex. The funds raised will be split between a $500 million allocation of Bitcoin and $500 million to building out energy and Bitcoin mining infrastructure in the region.

Is issuing fiat-backed stablecoins on public blockchains the best approach? Is a public, permissionless blockchain actually necessary? Let's take a closer look at what stablecoins supposedly gain from the use of public blockchains and whether there may be more practical options available to issuers.