China, Germany and the U.S.
Here is our pick of the 3 most important Stablecoin news stories during the week.
At the 4th Digital China Summit held in Fuzhou on 25 April, China and the world’s biggest bank, ICBC debuted more than thirty Digital Renminbi applications that it has independently developed during its participation in Digital Renminbi trials over the past year-long period, including:
- A complete product line of Digital Renminbi hardware wallets in the forms of cards and other devices that ICBC claims make it the “industry leader.”
- SIM card hardware wallets and Digital Renminbi 5G data applications developed via strategic cooperation with China Mobile.
- Use of API, H5 and SDK to achieve multiple forms of payment using Digital Renminbi wallets, including voice recognition payments, facial scan payments and dual offline payments;
- Exploration of innovative applications of Digital Renminbi smart contracts;
- Exclusive implementation of prepaid transit cards in collaboration with Tianfu Tong for the Sichuan province capital of Chengdu
Germany’s parliament approved a bill last week, which is expected to take effect on July 1 if it is approved by the upper house, the Bundesrat. Under the legislation, wealth and institutional investment fund managers, known as Spezialfonds (special funds), will be able to invest up to 20% of their portfolio in crypto.
If they all did so to the 20% limit, nearly $425 billion would move from other assets into crypto, based on the total assets under management (AUM) of such funds in Germany.
At the same time, two cornerstones of the German financial landscape, Deutsche Börse and Commerzbank, announced they are working together to create a blockchain-based marketplace for real estate and art.
Deutsche Börse and Commerzbank will work with fintech firm 360X to build a digital asset marketplace with the first reference transaction (minimum viable product) for each tokenized asset class planned for later this year, the companies said Thursday.
Also this week in the US the FED released a paper that concluded that with the GSC (Global Stable Coin) adoption scenarios they chose to explore, broadly point to modest implications for U.S. monetary policy implementation.
This week also saw the release of the CoinDesk Quarterly Review 2021 Q1 an overview of the state of the Crypto market. Some stablecoin highlights:
Supply: Now over 60 billion in USD is held within stablecoins, with Tether being the dominate player.
Not so stable: Surprisingly there is a big variation in the stability of each coin. Gemini’s (GUSD) has the lowest volume and liquidity and so is the most volatile.
So, in summary, we are seeing real tangible products being made available in China, the German government and industry are gearing up and private stablecoins (principally based in the US and in USD) continue to grow at a rapid rate.
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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