This Week In Stablecoins — Nov. 1, 2020
As stablecoins continue their march to $1 trillion market cap, here are the five stories we found most illuminating this week:
1. JPMorgan launches its Stablecoin, the JPM Coin, and a new Subsidiary, Onyx To Focus On Digital Currencies
The JPM Coin was used commercially for the first time this week by a large tech company to send payments around the world. Additional companies are being on-boarded. JP Morgan also announced Onyx, a new business unit, starting with 100+ staffers, to house its blockchain and digital currency efforts. JPMorgan is focused on relieving pain points in the world of wholesale payments where the industry could save hundreds of millions of dollars with better solutions. JPMorgan moves more than $6 trillion a day just in cross border payments. JPM believes it could shave 75% of the total cost associated with paper check, and make the money associated with checks available in a minutes as opposed to days. The unit will also provide services for Central Bank Digital Currencies.
2. State of Stablecoins- Q3 2020
Joel John, The Cipher, Senior Research Analyst, LedgerPrime — October 30
The crux of the thoughtful piece is that “…it becomes increasingly clear that market preference for digital assets has slowly switched from speculation to utility due to the desire to use a “stable asset’”.
Joel also noted that USDC and DAI are quickly catching ground on USDT driven by the advent of DeFi. USDC doubled it’s marketshare in Q3 vs. Q2, to over 22%, and DAI grew it’s share 4X to over 17%. Meanwhile, USDT’s declined in terms of volume from 75% in Q2 to 55% in Q3.
3. PayPal’s Move Into The Cryptocurrency & Stablecoin World
The main point of this short piece is that PayPal’s crypto offering will shine a spotlights on the stablecoin ecosystem, elevating the entire industry, driving further innovation , and growing the entire pie, — possibly exponentially!
4. China Bans Organizations and Individuals From Making Or Issuing Digital Currencies,
It’s interesting to see how the Asian press reports on Chain’s CBDC, aka DC/EP (Digital Currency’Electronic Payment). Most notably, that the Asian press China believes that China is “… positioning itself as the global leader in the field after having launched trials involving actual payments by consumers ahead of other countries”.
Draft legislation on the digital yuan is in a public comment period through Nov. 23. China plans to start issuing the digital yuan in mass before the Winter Olympics in Beijing in February 2022.
One under reported aspect of the bill is that it bans others from issuing digital currencies, highlighting that competing digital currencies like Libra, may not be allowed in China.
5. ConsenSys Selected by Societe Generale — Forge to Provide Technology For its CBDC Pilots
Societe Generale — Forge, the digital capital markets platform of the Societe Generale Group, selected ConsenSys to provide tech and services as part of its CBDC pilot activities.
Societe Generale — Forge is already at the forefront of blockchain related finance (e.g. issuance of a 100 million Euro bond on blockchain in 2019, and the issuance of a 40 million Euro bond settled with a CBDC in 2020). As Societe Generale — Forge focuses on CBDC issuance and management, ConsenSys, will help design the infrastructure and development tools Forge provides to central banks to issue and manage digital currencies.
This partnership comes on the heels of ConsenSys’ announcement of it’s work with the Hong Kong Monetary Authority (HKMA) and the Bank of Thailand (BOT) to study the application of a CBDC for cross-border payments.
“Stablecoins Are Killing It” episode #20, Nov. 2nd at 1pm est, features Sid Jain, Co-Founder of DeFiDollar, an index of stablecoins that uses Defi primitives to stay near the dollar mark and subsidize the collateralization ratio. Sid will be joined by Santiago Santos, Partner ar Parafi Capital, an SF-based alternative investment firm focused on decentralized finance markets, including DeFiDollar. Click here to register on Zoom
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