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The market capitalization of stablecoins increased to $18.53 billion, The rise of CBDC

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Original publish time: September 15, 2020

Original author: HaiBo Jiang, researcher of MYKEY Lab

We released MYKEY Crypto Stablecoin Report to share our interpretation of the development status of stablecoins and analysis of their development trends to help the participants in the crypto market stay updated on the development status of stablecoin. The MYKEY Crypto Stablecoin Report will be published every week, looking forward to maintaining communication with the industry and exploring the development prospects of stablecoin together.

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  • At present, the market capitalization of major stablecoins has increased by $987 million to $18.53 billion.
  • Last week, Tether additionally issued 500 million USDT on Tron twice.
  • MakerDAO added USDT and PAX as collateral for DAI.
  • DC/EP may be the most advanced CBDC project currently.
  • Sweden is experiencing the largest and fastest decline in cash use, and more and more stores no longer accept cash.
  • The Bank of Canada stated that there is currently no convincing reason to issue the CBDC.
  • No central bank is willing to take the risk of using distributed ledger technology without permission.

1. Overview of Stablecoin Data

First, let’s review the changes in the basic information of the various stablecoins in the past week(September 5, 2020 ~ September 11, 2020, same below).

Market Circulation

Source: MYKEY, CoinMarketCap, Coin Metrics

At present, the market capitalization of major stablecoins has increased by $987 million to $18.53 billion.

Source: MYKEY, Coin Metrics

In the past week, Tether additionally issued 500 million USDT on Tron twice. The circulation of USDC, PAX, BUSD, TUSD, HUSD, and GUSD increased by 263 million, 630,000, 103 million, 120 million, 3.6 million, and 700,000. The circulation of DAI decreased by 1.48 million.

The Number of Holding Addresses

Source: MYKEY, DeBank

Last week, the number of main stablecoin holding addresses on Ethereum all increased by 27,703.

Source: MYKEY, DeBank

The number of holding addresses of USDT, USDC, TUSD, and DAI increased by 24,525, 2,243, 319, and 916. The number of holding addresses of PAX decreased by 300.

The Number of Active Addresses

Source: MYKEY, Coin Metrics

The number of active addresses of stablecoins last week decreased by an average of 3.33% compared to the previous week.

The Number of 24-hour Transactions on the Public Blockchains

Source: MYKEY, Coin Metrics

Compared with the previous week, the number of daily transactions of major stablecoins increased by an average of 0.17%.

The Number of 24-hour Volume of Transactions on the Public Blockchains

Source: MYKEY, Coin Metrics

Source: MYKEY, Coin Metrics

The daily volume of transactions of major stablecoins last week increased by an average of 34.07% from the previous week.

2. The rise of CBDC

CBDC has received unprecedented attention, but the motives, policies, and technical design of each country are different. On August 24, BIS released a working paper entitled ‘The Rise of CBDC: Driving Factors, Methods, and Technologies’. The article introduces the current status of CBDC research by central banks in various countries, calls on central banks to learn from each other, and gives three representative cases of CBDC.

80% of the central banks surveyed are engaged in the research, experimentation, or development of CBDC

For centuries, a series of new payment technologies have met social needs. Coins, banknotes, checks, and credit cards are all innovations of their era. Now, there are more and more discussions about a new payment technology-CBDC. CBDC represents the digital liabilities of the central bank. Wholesale CBDC may become a new settlement tool between financial institutions, while retail CBDC will be the liability of the central bank that everyone can use. Although the concept of CBDC has been proposed decades ago, in the past year, the attitude of central banks on whether to issue CBDC has changed significantly.

During the Covid-19 epidemic, the public worried that the virus would spread through cash. The payment plan from government to individual is accelerating the transition to digital payment. Over time, the decline in cash usage in some countries has aroused people’s attention, and central banks in many countries have begun to consider issuing CBDC. As of the end of 2019, A total of central banks representing one-fifth of the world’s population stated that they may issue CBDC soon. Similarly, the proportion of central banks considering the issuance of retail CBDC within 1–6 years doubled in 2019 to 20%. Among the central banks surveyed, 80% are engaged in the research, experiment, or development of CBDC.

CBDC is mentioned more and more in speeches and reports. In the 12-week moving average of Google searches, the peak of Bitcoin appeared in early 2018, the peak of Libra in 2019, and the number of searches for CBDC is increasing.

Source: Rise of the central bank digital currencies: drivers, approaches and technologies

DC/EP may be the most advanced CBDC project currently

For many years, central banks around the world have been studying the concept and design of CBDC. Such as the ‘Dinerolectrónico’ of the Central Bank of Ecuador, the ‘Dukaton’ of the ABN-AMRO Bank, and the ‘Ubin’ of the Monetary Authority of Singapore.

Currently, the most advanced CBDC may be the Digital Currency Electronic Payment (DC/EP) of the People’s Bank of China. DC/EP represents debt in the form of cash from the People’s Bank of China, which can be used by the public and foreign tourists to China through an account-based interface.

The Bank of Canada stated that it is leading the work of the retail CBDC in response to emergencies such as a sudden decline in cash usage or widespread use of private digital currencies. The Central Bank of the Eastern Caribbean launched the ‘DXCD’ pilot. The Central Bank of the Bahamas launched the ‘Sand Dollar’ pilot.

Source: central banks’ websites

Commonality in CBDC

The development of global business digitization, the rise of private digital currencies, and concerns that cash may spread the COVID-19 virus have all contributed to the increase in interest in CBDC. However, the economic and institutional motivations for issuing CBDC vary from country to country. This part of the content hopes to cross the national dimension, explain the research and development of CBDC from the economic and institutional drive, and find common ground to explain why some countries/regions increase the research and development of CBDC. This will also help us understand how they designed CBDC projects.

Research has found that the development of CBDC is closely related to mobile and Internet utilization, innovation capabilities, and government efficiency. It develops faster in places with high per Capita GDP and high levels of financial development. Retail CBDC develops faster in areas with high innovation capabilities. Wholesale CBDC is positively related to financial development, which also reflects the role of wholesale CBDC in improving the efficiency of wholesale settlement. Many wholesale CBDC focus on cross-border dimensions.

Technical design of CBDC

‘CBDC pyramid’ is a classification method designed by CBDC. This method starts from the consumer needs addressed by retail CBDC, determines the technology, and then arrives at the final design plan.

The first thing to choose is the technical architecture. According to the roles played by central banks and private intermediaries in CBDC, the technical architecture of CBDC is divided into four types: direct CBDC, hybrid CBDC, intermediary CBDC, and indirect or synthetic CBDC.

The second layer is the infrastructure. It can be based on a traditional centralized database or distributed ledger technology (DLT). The difference in technology also leads to differences in the efficiency of CBDC and the degree of single point failure protection. However, among all the central banks engaged in the research of CBDC, no central bank is willing to take the risk of using the same distributed ledger technology without permission as Bitcoin.

The third layer is the admission of CBDC. The combination of account-based CBDC and identity verification can provide a basis for payment activities. But for those without a bank account or who care about privacy, it may be difficult to gain access. If the barriers to entry are lowered, it may bring new illegal activities.

The fourth layer is the cross-border payment of CBDC, which involves the interconnection of the retail and wholesale of CBDC.

In terms of structure, four central banks in the survey sample considered adopting a direct model, and seven central banks considered a hybrid or intermediary model. Many central banks have not yet determined the structure, but no central bank said they would adopt indirect or synthetic CBDC.

In terms of infrastructure, seven central banks are considering running CBDC on DLT, three are considering using traditional technology, and one is considering a combination of the two.

In terms of access, account-based access is the most common.

CBDC of most central banks focused on domestic use. Only a few projects, such as the CBDC built by the European Central Bank, France, Spain, and the Dutch Central Bank, will focus on cross-border payments.

Three examples of CBDC design method

Although the CBDC schemes of various countries may be different, central banks of different countries can also learn from each other. The following describes three unique CBDC schemes, which are located in Asia, North America, and Europe geographically. That is, the DC/EP of the People’s Bank of China, the e-krona of the Riksbank, and the work of the Bank of Canada on the CBDC.

The People’s Bank of China: DC/EP project (pilot phase)

Among all the current CBDC projects, the DC/EP of the Bank of China is at the highest stage of development, and China’s efforts on CBDC can be traced back to 2014. At the end of 2019, the Chinese announced a pilot study on the retail CBDC — digital currency and electronic payment tool (DC/EP) project. On April 20, 2020, a spokesperson for the People’s Bank of China confirmed that it is currently piloting projects in several cities including Shenzhen, Suzhou, Chengdu, Xi’an, and Beijing.

China’s CBDC has developed under the circumstances of a highly digital economy and the widespread use of digital payment services. In addition to facilitating online transactions, CBDC will also bring diversity to the current payment monopoly of Alipay and WeChat, which controls 94% of mobile payments. China’s DC/EP will serve as a supplement to M0, and it is not intended to completely replace physical cash.

The structure of DC/EP belongs to ‘hybrid CBDC’. CBDC represents direct claims to the People’s Bank of China, but access and real-time payment services are operated by intermediaries (authorized operators), and the central bank regularly receives and stores retail holdings and transaction copies.

The People’s Bank of China provides core infrastructure, while commercial banks, other payment service providers, telecommunications, and other intermediaries will provide services to the public. This method prevents risks from being concentrated in the central bank and also prevents duplication and waste of resources.

The People’s Bank of China does not require intermediaries to use specific infrastructure or specific technical routes. Financial intermediaries will be responsible for KYC verification obligations and retail services.

In terms of access, the People’s Bank of China decided to use value-based, semi-account-based, and account-based hybrid payment tools. The identity will be based on ‘loosely coupled account links’. Users can use DC/EP anonymously in daily transactions, but allow the central bank to track necessary data, implement prudential supervision, combat money laundering, and other criminal crimes.

Riksbank: Electronic Krona Project

Sweden is a highly digitalized economy. Sweden is experiencing the largest and fastest decline in cash usage, and more and more stores no longer accept cash. Therefore, Sweden is more likely to issue CBDC.

The Riksbank, like other central banks, has studied a variety of CBDC technologies and methods. The proof of the concept of the electronic Krona project is currently underway, and the purpose of CBDC is also to supplement cash.

The current proof-of-concept structure of the Riksbank is a hybrid CBDC. This design will require the Riksbank to provide emergency solutions when the intermediary fails to prevent users from being unable to use the electronic Krona in the end.

The architecture and technical implementation of electronic Krona are based on DLT.

In terms of access, the CBDC piloted by the Riksbank is account-based, but it also considers low-value prepaid cards. The Riksbank may also develop a CBDC payment card, which can be used directly for micropayments without accessing the wallet.

Bank of Canada: CBDC Emergency Plan

The Bank of Canada conducted effective research and policy communication on the topic of digital currency. Despite an early start, the Bank of Canada has not yet announced a retail CBDC pilot or proof of concept. Canada’s CBDC outlines a comprehensive plan, also lists potential structures, and accumulates relevant technology and knowledge through new projects, which also cooperate with other central banks.

However, the Bank of Canada stated that there is currently no compelling reason to issue CBDC, and Canadians will continue to receive good services from the existing payment ecosystem, provided that it is modern and still suitable for current goals. The world is changing rapidly, the Bank of Canada will consider the scenario of issuing the CBDC so that it can continue to provide Canadians with a reliable payment method.

The Bank of Canada considered reducing or eliminating the use of physical cash, as well as the significant progress made in the use of private cryptocurrencies or stablecoin as a means of payment.

Architecturally, Canada’s CBDC will not adopt an indirect/synthetic model and consider the use of direct CBDC, hybrid CBDC, or intermediary CBDC.

In terms of infrastructure, the Bank of Canada has a lot of DLT-based proof-of-concept experience. DLT can be used as an infrastructure solution, but it is not necessary.

In terms of access, the Bank of Canada considers access solutions based on accounts and coupons. Anonymous coupons will be allowed to be used for micropayments. Large usage will require the use of account-based access rights.

Sum up

CBDC is a new type of payment technology that may soon be launched in many countries around the world. Research shows that CBDC is developing faster in countries with higher mobile phone usage and innovation capabilities. Countries will vary according to their economic situation and priorities, but they also have some key common characteristics. All of the CBDC designs investigated are supplements of cash, none of the designs adopt an indirect model, and no central bank is willing to take the risk of using the same distributed ledger technology without permission as Bitcoin.


To better communicate with industry insiders, we decided to add two sections for questions of readers and opinions of guests. If readers have questions about stablecoins, please contact us. We will pick meaningful questions to answer in the next issue. At the same time, welcome guests from the industry to share your views on stablecoins. Contact information:

This is what we’re sharing in this MYKEY Crypto Stablecoin Report, welcome to stay tuned for follow-up crypto stablecoin reports. We will provide more interpretations of the development status of stablecoins and analysis of their development trends to help you stay updated on the development status of stablecoin in the follow-up report.

PS: MYKEY Lab has the final right to interpret the content of the article, please indicate the source for the quotation. Welcome to follow our official account — MYKEY Lab: MYKEY Smart Wallet.

Past review

Crypto Stablecoin Report 13: The market capitalization of stablecoins reached $14.387 billion, Stablecoin pool Reserve

Crypto Stablecoin Report 14: The increase of Ethereum Gas Fee makes the transfers of stablecoin transactions on the blockchain

Crypto Stablecoin Report 15: The market capitalization of stablecoins increased to $15.961 billion, On-chain usage of stablecoins

Crypto Stablecoin Report 16: The connection between stablecoins and real assets

Crypto Stablecoin Report 17: The market capitalization of stablecoins increased to $17.544 billion, Decentralized payment protocol Celo

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