Crypto has a Trust deficit!
Here is our pick of the 3 most important Stablecoin news stories during the week.
Let’s call it as it is! Hacks, scam ICOs’ and other wild value accretive promises that can never be kept, the list of trust destroying behaviour within and around this industry goes on and on.
The Tech world may (just may), get away with the mantra of move fast and break things, when it incorrectly identifies a political advertisement as news (or to use the accurate definition, fake news), it cannot get away with naming a Token as a currency. The chasm between the two is enormous. One can be used within limits to swap with something of value the other is a State backed IOU of value.
Until the Industry finds a way to address this trust deficit, it will remain confined to a small corner of the global economy, loved by the curious, frowned on by the risk adverse and just generally ignored by the rest.
Are CBDC’s the answer? This week Andrew Bailey, head of the BoE weighed in. Firstly he said Bitcoin is not a currency. However, he also called for Regulators to stop being passive, there are merits to this new technology and they (the Regulators) should be proactive in encouraging innovation and balancing consumer/market protection. He went on to call for a global regulatory forum and we should start with CBDC for government currencies before experimenting with baskets of whatever (learn to crawl before we walk).
Reuters report on the speech here.
The actual speech here.
Youtube with some interesting discussion from the panel at the end.
In the meantime, in the Crypto world that the Governor is trying to understand, stablecoins keep growing. The current supply of stablecoins Binance USD (BUSD), Dai (DAI), HUSD, Paxos Standard Token (PAX), USD Coin (USDC), USDK, Tether (USDT), USDT_ETH, and USDT_TRX has been increasing by roughly $100 million daily for almost two months to a total of 16 billion.
And now for something completely different, Bermuda has launched a digital token to stimulate the local economy following the COVID-19 pandemic. The Bermudan government partnered with a private stablecoin firm to launch the token, but insists it has no plans to issue a central bank digital currency.
So we have the Governor of the Bank of England urging Central Banks to become proactive, set standards and get to work with CBDC’s, while we see further evidence of appetite for this technology amongst a segment of consumers.
Alan Scott is an expert in the FX market and has been working in the domain of stablecoins for many years.
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