MYKEY Lab
Published in

MYKEY Lab

Stablecoin stepped out of Ethereum, Global stablecoins triggered the regulatory awakening

Original link: https://bihu.com/article/1400050338

Original publish time: November 3, 2020

Original author: Xiang Yao, 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, looking forward to maintaining communication with the industry and exploring the development prospects of stablecoin together.

This is the first time that the Stablecoin Report has been published as a monthly report, please feel free to leave suggestions.

Quick Preview

  • The market capitalization of major stablecoins has increased by $1.510 billion to $22.13 billion.
  • Last month, the circulation of USDT, USDC, BUSD, and DAI increased by 299 million, 306 million, 301 million, and 26 million. The circulation of TUSD decreased by 194 million.
  • USDC has stepped out of Ethereum and has been deployed on Algorand and Solana, with a supply of more than $30 million.
  • BUSD continues to grow on the BSC.
  • Stablecoins have attracted the attention of global regulators. The European Commission, the Financial Stability Board, and the IMF have issued regulatory frameworks or reports.

1. Overview of Stablecoin Data

First, let’s review the changes in the basic information of the various stablecoins in the past month(September 26, 2020 ~ October 25, 2020, same below, the data report of the natural month will be provided from next month).

Market Circulation

Source: MYKEY, CoinMarketCap, Coin Metrics

At present, the market capitalization of major stablecoins has increased by $1.510 billion to $22.13 billion.

Source: MYKEY, Coin Metrics

In the past month, Tether additionally issued 299 million USDT on Ethereum. The circulation of USDC, BUSD, DAI, PAX, HUSD, and GUSD increased by 306 million, 301 million, 25.6 million, 74.89 million, 96.12 million, and 510,000. The circulation of TUSD decreased by 194 million.

The Number of Holding Addresses

Source: MYKEY, DeBank

Last month, the number of main stablecoin holding addresses on Ethereum all decreased by 215,000.

Source: MYKEY, DeBank

The number of holding addresses of USDT decreased by 253,000 and the number of holding addresses of USDC increased by 33,000. The number of other stablecoins holding addresses has not changed much.

The Number of Active Addresses

Source: MYKEY, Coin Metrics

The number of active addresses of stablecoins last month increased by an average of 6.55% compared to the previous month.

The Number of 24-hour Transactions on the Public Blockchains

Source: MYKEY, Coin Metrics

Compared with the previous month, the number of daily transactions of major stablecoins increased by an average of 11.83%.

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 month decreased by an average of 28.82% from the previous month.

2. Stablecoin stepped out of Ethereum

About 70% of stablecoins still choose Ethereum as the main issuance platform, and except for USDT which chooses to be issued on multiple blockchains, most stablecoins choose Ethereum as the only issuance platform. During the continued congestion of Ethereum, in addition to the steady increase of USDT on Tron, stablecoins have gradually stepped out of Ethereum. USDC chose multiple smart contract platforms to deploy, while BUSD began to expand within its ecosystem.

USDC has been deployed on Algorand/Solana

The Centre Alliance announced several pieces of cooperation information in September and October, announcing that it would deploy USDC assets on Algorand, Stellar, and Solana. Among them, the supply on Algorand and Solana has reached $7.180 million and $25 million, and USDC on Stellar will be issued in the first quarter of 2021.

BUSD continues to grow on BSC

As a stablecoin asset issued by Binance, BUSD not only exists in the form of ERC-20 on Ethereum but is also deployed on Binance Chain (BEP2) and Binance Smart Chain (BEP20). With the progress of mining on BSC, the number of holding addresses of BUSD on BSC has exceeded 9,100, which is the same as the number of holding addresses of BUSD on Ethereum. Since the bridge of assets is provided by Binance Exchange, it is not easy to count the supply of BUSD on each blockchain. However, according to bscscan, the supply of BUSD on BSC should have exceeded $40 million, among which the amount of BUSD on Pancake exceeds $18 million.

3. Stablecoins attracted global regulatory attention

As early as 2019, stablecoins have attracted the attention of global regulators. The concept of ‘GSC’ was first formally proposed in the ‘Global Stablecoin Evaluation Report’ of the G7 Stablecoin Working Group in October 2019. ‘Global’ mainly refers to the stablecoin spanning multiple jurisdictions. The Bank for International Settlements also released a report on strengthening cross-border payments in July 2020, suggesting that CBDC and global stablecoins can provide potential assistance for cross-border payments.

The rapid growth of stablecoins in 2020 has even attracted the attention of global regulators. The European Commission, the G20 joint FSB, and the International Monetary Fund have successively issued regulatory reports on stablecoin.

European Commission announced the regulatory framework for encrypted assets and stablecoins

The European Commission published the final draft of the regulatory framework for encrypted assets on September 24. The report is 168 pages long and elaborates on the background of the proposal, the current status of the development of encrypted assets, and the regulatory recommendations for stablecoins.

The report pointed out that although the scale of the encrypted asset market was still small and did not pose a threat to financial stability, this situation may change with the emergence of ‘GSC’. Because ‘Global Stablecoin’ has stable value and uses the network effects generated by companies promoting these assets to seek wider applications. The European Commission will create a comprehensive and holistic EU ‘stablecoin’ framework for encrypted assets that are not covered by the EU’s existing financial services legislation to mitigate the risks identified by the Financial Stability Board, especially financial stability risks.

The plan still needs to be considered by the legislative counterparts of the European Commission, the European Parliament, and the European Council.

The G20 joint FSB released a stablecoin regulatory report

On October 23, the FSB released the “Regulation, Supervision, and Supervision of the ‘GSC’ arrangement” report, which made high-level recommendations for the supervision, supervision, and supervision of the ‘GSC’ arrangement.

The FSB pointed out that the so-called ‘stablecoin’ is a specific type of encrypted assets that had the potential to improve efficiency in the delivery of financial services by linking their value to one or more other assets (e.g. sovereign currencies) to solve the high volatility of ‘traditional’ encrypted assets, but at the same time could pose risks to financial stability, especially in the case of mass adoption. Stablecoins have the potential to improve payment efficiency and promote financial inclusion, but the use of ‘GSC’ may have a huge impact on the justice of many countries.

The FSB was established after the G20 Summit in 2009. It was officially commissioned by the G20 to provide observation reports and policy recommendations for the global financial system, sponsored and led by the Bank for International Settlements.

The G20 is working with the IMF, the World Bank, and the BIS to discuss the complexity of the GSC in terms of practice and technology, including design and interoperability, and assess the potential and challenges of CBDC in cross-border payments. By the end of 2022, the G20 will work with the IMF, the World Bank, and BIS to complete the framework for regulating stablecoins and research on the design, technology, and experiments of CBDC.

The IMF issued a report showing that CBDC has potential, but it cannot solve all problems

A report issued by the IMF on October 16 stated that CBDC may benefit those countries that wish to increase control over their monetary policy, but it will not solve all crises.

The IMF pointed out that new digital currencies including CBDC and GSC had attracted regulatory attention. CBDC and GSC can reduce transaction costs through competition, broaden service channels through mobile devices, and promote financial inclusion. The cross-border use of digital currency will also bring risks and policy challenges. For countries with economic downturns, CBDC is not a panacea solution. It cannot save those countries with high inflation rates or similar domestic problems.

The report concluded that CBDC had not yet qualitatively changed the global pattern of currencies, but it may intensify the effects of currency substitution and currency internationalization. And if the GSC and the existing currency have the same accounting unit, it may have a currency effect similar to that of CBDC, and at the same time, there is a potential threat to financial stability. If a new GSC with an independent accounting unit appears (e.g. a new currency with a basket of currencies as a reserve), it can also provide better financial services, but it will have a more profound impact on global currency and financial stability.

Tips

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 you with more analysis of the development status, trends and international impact of stablecoins to help readers stay updated on the development status of stablecoin.

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 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

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

The market capitalization of stablecoins reached $19.86 billion, The latest development of several decentralized stablecoin protocols

The market capitalization of stablecoins reached $20.62 billion, Stablecoin regulatory policy of the United States

About Us

KEY GROUP: https://keygroup.me/

MYKEY Web: https://mykey.org/

BIHU: https://bihu.com/people/1133973

Telegram: https://t.me/mykey_lab

Twitter: https://twitter.com/mykey_lab

Medium: https://medium.com/mykey-lab

Github: https://github.com/mykeylab

Youtube: MYKEY Laboratory

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store