Stablecoins Financial News

FTX crash, regulatory enforcement actions, recent security breaches on DeFi protocols, and attacks on Stablecoin liquidity pools, have eroded the cryptocurrency's stability promise. A Stablecoin is a popular form of cryptocurrency designed to maintain a constant value through a peg to another asset. In 2022, the cumulative market capitalization of Stablecoins was around $180 billion, which declined to nearly $120 billion in 2023. «Many investors have chosen to divest their Stablecoin holdings, partly in reaction to lack of transparency around the underlying reserves that support many stablecoins. In a rising interest rate environment, the appeal of higher yields offered by traditional assets is also likely contributing to a shift away from stablecoins,» Moody's said in its report.

The Canadian Securities Administrators (CSA) has released interim terms and conditions to guide cryptocurrency exchanges and asset issuers on stablecoin investments following its previous decision.

Stablecoin market dominance has reached its lowest point in 18 months, according to a Monday report.

Stablecoin market dominance has reached its lowest point in 18 months, according to a Monday report.

Stakeholders in New Zealand are advocating for a gradual and meticulous strategy in regulating the crypto industry in the country. On the other hand, Singapore is embracing a proactive and comprehensive regulatory stance toward stablecoins.

During a Twitter "Ask Me Anything" (AMA) session on July 31, Binance CEO Changpeng "CZ" Zhao expressed his intention to introduce smaller algorithmic Stablecoins to the market for investors to have alternatives to the existing global Stablecoin giants.

Republicans and Democrats are likely to come to an agreement on the proposed bill to regulate stablecoins in the United States. 

Reserve Bank of India’s Deputy Governor has warned that stablecoins pose an existential threat to policy sovereignty and are not useful to economies like India. 

In an interview with The Block, Fadi Aboualfa, the head of research at crypto brokerage Copper, expressed that the existing Central Bank Digital Currency (CBDC) models are "not a viable cash equivalent that people could use in daily transactions."

Singapore’s central bank has proposed a whitepaper on purpose-bound money (PBM), a protocol that will define benchmarks for the use of digital money including central bank digital currencies (CBDCs) and stablecoins. 

Europe’s financial overseer does not seem overly concerned about cryptocurrencies’ impact on the financial system, but still said regulators should monitor risks in case. 

stablecoins during such times.What are Stablecoins?Stablecoins are cryptocurrencies designed to maintain a stable value, typically by being pegged to a stable asset such as the US dollar. Investing in stablecoin can help mitigate market volatility because they are less susceptible to price fluctuations than other cryptocurrencies such as Bitcoin or Ethereum or any other.How can Stablecoin mitigate market volatility? Stablecoins can mitigate market volatility to some extent. 1. It can help in hedging against volatility

The top Japanese financial regulator has stated that it intends to police “algorithmic stablecoins.” And the South Korean central bank also wants the power to regulate fiat-pegged tokens.

The cryptocurrency market continues to wade through the murky red waters of a bearish trend – made worse by the collapse of FTX. Despite the negative market mood, ADA has so far held well against the rest of the market, down only 0.6% in the past 24 hours.

FTX CEO Sam Bankman-Fried has confirmed that the crypto platform is working on launching its own stablecoin. 

Digital Rupee (or the e₹), it indicates the design choices that the RBI is inclining towards to pursue these motivations, it briefly charts a forward-looking path till the launch of the e₹, and it pushes policy debate into the next gear – from speculation to contentions on merits on motivations, design, outcomes. Yet, misalignments abound – particularly about what the RBI expects of the e₹ and what it can be reasonably expected to deliver. One example is the impact a CBDC would have on the wider adoption of crypto assets and stablecoins. Globally, central bankers are divided in opinion on whether the emergence of crypto assets led to an acceleration of their CBDC projects: in a May 2022 survey by the Bank for International Settlements, six out of ten respondent central banks agreed. This may have been because a clear assessment of the adoption of crypto assets for different use cases and their impact on the economy appears to have so far eluded policymakers: the same survey indicated that a majority of central banks largely characterized the use of crypto assets in their jurisdictions – both in relation to domestic payments and cross-border payments, as “use by niche groups” and “trivial or no use”. Earlier in February 2022, the Financial Stability Board (FSB) had acknowledged significant data gaps that made an assessment of the impact of crypto assets on financial stability difficult to identify and quantify.

crypto assets led to an acceleration of their CBDC projects: in a May 2022 survey by the Bank for International Settlements, six out of ten respondent central banks agreed. This may have been because a clear assessment of the adoption of crypto assets for different use cases and their impact on the economy appears to have so far eluded policymakers: the same survey indicated that a majority of central banks largely characterized the use of crypto assets in their jurisdictions – both in relation to domestic payments and cross-border payments, as “use by niche groups” and “trivial or no use”. Earlier in February 2022, the Financial Stability Board (FSB) had acknowledged significant data gaps that made an assessment of the impact of crypto assets on financial stability difficult to identify and quantify. The RBI’s stated expectation is that the e₹ will provide the benefits of virtual currencies but at the same time protect financial consumers and avoid the ‘damaging social and economic consequences’ of crypto assets. If it’s too good to be true, it usually is, and this appears to be the case with the RBI’s projection of the e₹ as being a panacea to the many risks associated with crypto assets and stablecoins.

History repeated itself as the Polkadot-based decentralized finance (DeFi) platform Acala’s native stablecoin, Acala Dollar (aUSD), lost its parity, plummeting 99 per cent and its value was reduced to some fractions of a cent. However, this time, it was a hacking attack that led to this steep fall. aUSD was under pressure after hackers exploited a bug in a newly deployed liquidity pool to mint 1.28 billion tokens. The infamous depegging of Terra Foundations stablecoin is not an old legend for crypto investors, which wiped out about $30 billion from investors kitty in merely 100 hours.

Issuers of 'stablecoins' tie their value to traditional currencies like the U.S. dollar.

The Financial Stability Board (FSB) said on Monday it would propose ”robust” global rules for cryptocurrencies in October, following recent turmoil in markets that has highlighted the need to regulate the ”speculative” sector.

My dear crypto brothers and sisters,