Group items matching

in title, tags, annotations or url

Decentralized finance (DeFi) is expanding into the world of interest rate swaps (IRS), a derivative instrument for exchanging fixed and variable interest rates, which account for more than $1 quadrillion in exchanged value per annum in traditional finance. DeFi firm Voltz Labs has launched a non-custodial automated market making (AMM) IRS trading platform based on the Aave and Compound DeFi USDT, USDC, DAI and ETH lending markets. However, IRS AMMs are challenged by DeFi markets' lack of fixed-rate products off which to price swaps. (Traditional markets offer both variable- and fixed-rate products.)

In July 2024, DeCurret plans to commercialize its DCJPY tokenized deposit network of over 100 Japanese institutions and enterprises that have explored proofs of concept (PoCs) for various use cases. DeCurret outlined several consumer oriented use cases, including retail in-store usage, to buy non fungible tokens (NFTs), and consumer carbon credits. All of them have programmable money elements. The DCJPY platform envisages a financial zone where banks issue deposit tokens and the money transfers take place, and separate distributed ledger technology (DLT) business zone networks (e.g., a metaverse zone, an NFT zone and an environmental value zone).

The Group of Twenty (G20) unanimously adopted the "G20 Finance Ministers and Central Bank Governors Communique" during its meeting in Marrakesh, Morocco, and accepted the crypto regulatory roadmap proposed in the "IMF-FSB Synthesis Paper: Policies for Crypto-Assets" joint report published by the International Monetary Fund (IMF) and the Financial Stability Board (FSB) in September 2023. The paper advocates for comprehensive oversight of crypto instead of a blanket ban. Its high-level recommendations include cross-border cooperation and information sharing between regulators, a demand for comprehensive governance and risk management frameworks for crypto companies, and a guarantee of access to relevant data provided by companies to the authorities. https://twitter.com/FinMinIndia/status/1712589236765893035

Coinbase Wallet now allows for the transfer of crypto through a link that can be sent through popular social media sites and messaging apps apps like iMessage, Telegram, WhatsApp, Facebook, Instagram and TikTok. And there are no payment fee when sending USD Coin (USDC). Clicking the link will take the recipient to their device's app store to download Coinbase Wallet - if not already downloaded - where they can create a wallet in one click. If the funds aren't claimed within two weeks, they will be returned to the sender. There appear to be no transaction-size limits. https://www.coinbase.com/blog/with-coinbase-wallet-sending-money-is-now-as-easy-as-sending-a-text

"The RBZ says that these tokens can be used for payments, with tokens available for purchase via banks, which will create dedicated e-gold wallets and cards to facilitate person-to-person or person-to-business payments, both online and offline. This is, in effect, a gold-backed central bank digital currency. The economics of gold as a defence against inflation are somewhat heterodox but not absurd. Introducing a CBDC is a complex business, however. Questions around implementation abound. Not only will the central bank have to retain the currency reserves to ensure that it can redeem the coins and tokens, it will also have to maintain the gold reserves backing the tokens."

"Representations about deposit insurance may be particularly relevant with respect to new financial products or services, especially those involving new technologies such as digital assets, including crypto-assets. New technologies may yield significant benefits for consumers, workers, and small businesses. Nonetheless, especially with respect to new technologies, some market participants may seek to entice consumers to use their products or services by deceptively advertising that uninsured products or services are FDIC-insured. These misrepresentations disadvantage financial institutions that truthfully market FDIC-insured accounts to consumers. Such misrepresentations also harm consumers, who may find that their assets are not insured in a time of financial distress."

"It is well-understood in the cryptocurrency community that Tether's reserves are a polite fiction. If pushed on this, clueful members of the community, such as their co-conspirators, will (quietly) admit that Tether depends on a de facto guarantee of support from members of its consolidated group, such as Bitfinex, which can inject more equity at will. The community believes, based on prior experience, that there is appetite within the crypto community to conduct "private bailouts" to rescue their central bank if it comes under stress."

In testimony before the U.S. House Financial Services Committee, Fed Vice Chair Lael Brainard said that no decision has been made about whether the Fed will issue central bank digital currency (CBDC). However, she said that it is important to undertake the necessary work to inform any such decision and to be ready to move forward should the need arise. For example, a digital dollar could help ensure financial system stability if crypto-assets and CBDCs issued by other countries become increasingly popular.

"Chainlink Proof of Reserve enables the reliable and timely monitoring of reserve assets using automated audits based on cryptographic truth."

The Bank of England's Andrew Hauser argues that a central bank digital currency (CBDC) could have a big impact on the the size, composition and risk profile of the central bank's balance sheets; for the monetary policy transmission mechanism, and for monetary control. He argues for the need to understand these impacts, and build them into the design of CBDCs and central bank operational toolkits.

The Financial Stability Board (FSB) published its 2022 policy plans to promote global financial resilience, including on safely harnessing the benefits of digitalization:

"In a proposal put forward to token holders, Terra said that it wants to burn the nearly 1 billion UST (roughly $690 million) in the community pool while increasing the Base Pool of LUNA available to 100 million which in turn increases minting capacity to over $1 billion. This will help expedite the outflows of UST from the system, and thus pushing it back closer to its peg, while pushing down the price of Luna. "Currently, the burning of UST is too slow to keep pace with the demand for excess UST to exit the system, which is hindered by the BasePool size," reads the proposal. "Eliminating a significant chunk of the excess UST supply at once will alleviate much of the peg pressure on UST.""

Terraform Labs announced that the blockchain's miners had decided to halt the Terra blockchain in order to "prevent governance attacks" following "severe [luna] inflation." Later, Terra said validators are working to restart the network "in a few minutes.

The crypto market was always going to be vulnerable to the return of a positive yielding fiat environment. This is because its gains were always likely the function of an excessively cheap debt financing world. If that's true, it's entirely possible that the last 10 years or so of sky-rocketing crypto gains were largely a transfer of "cheap money" financial profiteering, which - were not for the post GFC regulatory environment - would otherwise have been captured by the banking industry in the form of sky-high bank equity valuations.

"This suggests that Tether is in a contraction phase, just like USD Coin. But Tether's contraction is more muted, at least for now. USD Coin has shrunk by 11%. Using the quantity of Tethers in Tether's treasury wallet as our measure, Tether has contracted by only 4%."

The primary function of Abaku Capital is the maintenance and promotion of a family of tokens aimed at facilitating commerce. The flagship token is designed for monetary stability, and as a hedge against foreign-exchange risk, whereas the rest of the family comprises tethers to various currencies of interest. This token is, in essence, a cryptonisation of the International Monetary Fund's proprietary currency, the SDR (special drawing rights). The SDR, and therefore its Abaku counterpart, is an asset-backed currency based on a basket of national currencies managed by the IMF.

Tether published its March 31, 2022 quarterly assurance opinion showing that reserve assets exceed its USTD liabilities ($82.4 billion versus $82.2 billion) and revealing a 17% decrease in commercial paper holdings (to $20.1 billion). Also, the average rating of commercial paper and certificates of deposits has gone up from A-2 to A-1, and investments in money market funds and U.S. treasury bills have gone up 13% to $39.2 billion.

"Though rumors about BlackRock and Citadel are just that, it does seem very plausible that some large mainstream hedge fund was involved in the Terra depeg. That would be a major double-edged sword. On the one hand, it would mean crypto is regarded as a robust and trustworthy enough ecosystem that mainstream finance is willing to risk shorting it. The emergence of more such shorts would, furthermore, benefit the ecosystem long-term by providing a profit motive for asking hard questions about projects."

"The Federal Reserve Bank of Kansas City revoked the so-called master account of a payments firm that came to prominence earlier this year when Republican senators raised questions over how that account had been granted, according to a letter sent by Sen. Pat Toomey (R., Pa.). In that letter, obtained by The Wall Street Journal, Mr. Toomey asked for more details about the Kansas City Fed's decision to terminate the account for the Colorado-based Reserve Trust. The decision to grant that account had faced scrutiny earlier this year after Mr. Toomey and other Republicans questioned Sarah Bloom Raskin, then President's Biden nominee for a seat on the Fed's board of governors, over her possible role in helping Reserve Trust to secure the master account when she served on its board."