Fintech Daily Digest

The National Bank of Ukraine has been doing some serious work on central bank digital currency, including a limited pilot!

MakerDAO is a protocol behind the stable coin DAI - a cryptocurrency that maintains a 1:1 peg to the USD. Think of 1 DAI as $1. What makes it unique is each DAI is backed by Ether instead of a 3rd party claiming to have the required collateral. Since Ether is volatile this poses some interesting challenges to maintain the peg.

MakerDAO has launched the multi-collateral version of its DAI stablecoin. But despite the rapid growth of the sector and the diversification of assets involved, DeFi is still influenced by a handful of central players: Namely, Polychain Capital, a16z, 1confirmation, and unknown MKR whales. With governance decisions largely influenced by those with the largest stakes to lose, some crypto veterans are pushing for a closer examination of MakerDAO's marketing directives.

"How long will regulators allow pseudonymous usage of stablecoins to continue? FATF regulations are supposed to be technology-neutral. So far FATF hasn't had much to say on stablecoins. But you can be sure that something is in the works, and it isn't likely to be good for stablecoin operators. The problem is that granting permissioned-pseudonymity to stablecoin operators contradict technology-neutrality. It sets one set of standards for bank accounts and another for stablecoins."

Issuers of today's fiat-backed stablecoins (such as PAX, USDC and TUSD) need to identify (or KYC) only those users who convert between bank account money and stablecoin, not all holders."

Bakkt's bitcoin core futures contract saw saw 2,728 contracts traded ($20 million) and $1.75 million in open interest outpacing the record of 1,179 contracts on October 25, as the spot market price of BTC plummeted under $7,000 on November 22.

The U.S. Financial Crimes Enforcement Network views all stablecoins, whether backed by a currency, a commodity, or even an algorithm, as falling under their remit to protect "money transmission services, and all stablecoin administrators must register as a Money Services Business with FinCEN.

U.S. Congresspersons Sylvia Garcia and Lance Gooden introduced the Managed Stablecoins are Securities Act of 2019. The bill would clarify that "managed stablecoins" are securities under the Security Exchange Act of 1934 and thus regulated by the SEC.

Grayscale Investments is launching its Digital Large Cap Fund (GDLCF), a diversified crypto investment product for public trading. It includes five major cryptos including Bitcoin and Ether, and will trade on the OTCQX Best Market platform.

In March 2019 the U.S. Fed proposed amendments to its Regulation D (Reserve Requirements of Depository Institutions) to lower the rate of interest paid on excess balances ("IOER") maintained at Reserve Banks by "pass-through investment entities" (eligible institutions that hold a very large proportion of their assets in the form of balances at Reserve Banks). The Fed claims that PTIEs-could compromise its ability to conduct monetary policy by interrupting the transmission of IOER and Overnight Reverse Repurchase Agreement Facility rates to the federal funds rate. Also, a shift in deposits away from commercial banks could substantially reduce funding for loans, and that in times of financial stress, PTIEs could be procyclical in draining liquidity from the banking system.

Morocco is looking to expand access to financial services through the integration of blockchain technology in the country's financial sector.

During a recent panel discussion, Stefan Ingves, the Governor of Sweden's central bank, Sveriges Riksbank, laid out a six-step plan for the introduction of is central bank digital currency.

There are almost 2 million addresses with balances between $6600 and $7900 which indicates that there might be buy/sell activities within those ranges. Also $6600 seems to be a relevant level of support.

54% of bitcoin addresses are in the money at current price levels ($7,100) according to blockchain intelligence firm IntoTheBlock. Most of the in-the-money addresses purchased in the $900 to $4,180 range and significant number appear to have purchased at an average cost in the $4,180-$6,631 range.

The European Investment Fund and the European Commission have put up €100 million for a dedicated investment scheme that will make capital available to AI and blockchain projects via VC funds or other investors.

The UK Jurisdiction Taskforce published a legal statement on the status of crypto-assets and the enforceability of smart contracts under English private law. From this foundation, it is hoped that both regulators and the courts can build a framework which will support the development and use of crypto-assets and smart contracts.

This paper systematically discusses general stablecoin design, decompose existing stablecoins into various component design elements, explore their strengths and drawbacks, and identify future directions.

Bakkt confirmed its forthcoming launch of a cash-settled Bitcoin futures contract that will be listed on ICE Futures Singapore as of Dec. 9.

SIX presents seven possible futures for money, in both its physical and digital form. The scenarios focus on Switzerland but continuing discussions will also take us beyond its borders. What is considered money, what form it takes, and how it is used, all look set to change dramatically in the near future.

This is the fourth part in an article series by the Human Rights Foundation on privacy and cryptocurrency. This part in the series will explore private methods for acquiring cryptocurrency and stablecoins in different areas of the world.