Stablecoin growth is the big story!
Here is our pick of the 3 most important Stablecoin news stories during the week.
This week a research report by The Block gives a very good status update on how much has been achieved in the stablecoin space.
“Stablecoins: Bridging the Network Gap Between Traditional Money and Digital Value” aspires to serve as a foundational text, for not only digital asset practitioners and enthusiasts, but financial services professionals and global policymakers as well.
Some Highlights since January 2020 to now:
- Supply = $5.9B → $54.2B
- Monthly Tx volume = $23.5B → $384B
- Addresses holdings >$100 = 284k → 1.85M
- Daily active addresses = 53k → 307k
- Daily transactions = 98k → 594k
Stablecoins: Bridging the Network Gap Between Traditional Money and Digital Value — Brought to you by GMO Trust
Meanwhile the BIS (Bank of International Settlements or the Central Bankers, Banker) release a report into key design considerations for CBDC (Central Bank Digital Currencies) and the trade offs that will have to be made. Key takeaways;
- A trusted and widely usable retail CBDC must be secure and accessible, offer cash-like convenience and safeguard privacy.
- Various technical designs satisfy these criteria to different degrees, and the associated trade-offs need to be identified.
- The design of a retail CBDC needs to balance the credibility of direct claims on the central bank with the benefits of using payment intermediaries.
The technology of retail central bank digital currency
Also this week a New Zealand-based firm says it has created the country’s first regulatory compliant stablecoin, one backed by the country’s dollar. New Zealand dollar reserves backing the stablecoin are to be confirmed by an accounting firm on a quarterly basis.
Launching today, the cryptocurrency is backed one-to-one by the New Zealand dollar and deployed on the Ethereum blockchain by Blockchain Labs. $NZDs’ code utilizes a framework developed by Coinbase and Circle-founded Centre group.
Compliant Stablecoin Launches in New Zealand
So in summary, stablecoins are growing fast and have established themselves as a really important element of the Crypto ecosystem, while Central Banks are wrestling with many big issues still at the design stage.
Alan Scott is an expert in the FX market and has been working in the domain of stablecoins for many years.
We have a self imposed constraint of 3 news stories per week because we serve busy senior Fintech leaders who just want succinct and important information.
For context on stablecoins please read this introductory interview with Alan “How stablecoins will change our world” and read articles tagged stablecoin in our archives.
New readers can read 3 free articles. To become a member with full access to all that Daily Fintech offers, the cost is just US$143 a year (= $0.39 per day or $2.75 per week). For less than one cup of coffee you get a week full of caffeine for the mind.