Here is our pick of the 3 most important Stablecoin news stories during the week.
Come back Zuck all is forgiven!
We spent so much time pondering Libra, then Diem, that when Facebook gave up because it could not make any headway with Regulators, it almost felt like nothing new would happen in the stablecoin space and certainly not at scale.
However, then came the recent Executive Order (EO) from the White house and now the UK Government has announced a series of measures to make the UK a global hub for cryptoasset technology and investment. It includes:
- Stablecoins to be brought within regulation paving their way for use in the UK as a recognised form of payment.
- introducing a ‘financial market infrastructure sandbox’ to enable firms to experiment and innovate,
- establishing a Cryptoasset Engagement Group to work more closely with the industry,
- exploring ways of enhancing the competitiveness of the UK tax system to encourage further development of the cryptoasset market,
- and working with the Royal Mint on a Non-Fungible Token (NFT) this summer as an emblem of the forward-looking approach the UK is determined to take.
Maybe someone like Frax, an algorithmic stablecoin protocol, could now be interested in being regulated in the UK? It is mulling the idea of buying billions of dollars’ worth of native tokens of major blockchains to use as reserve collateral for its stablecoin.
- DeFi protocol Frax is considering buying native tokens of blockchains that support its stablecoin.
- The purchased tokens, such as ether, would then be used as reserve collateral for the stablecoin.
In the meantime, Meta (the new brand for Facebook) has drawn up plans to introduce virtual coins, tokens and lending services to its apps, as Facebook’s parent company pursues its finance ambitions despite the collapse of a project to launch a cryptocurrency.
So in summary, Meta has not given up on the world of Crypto, but has on the idea of a stablecoin, just when the UK Government has stepped up and said we will allow the regulation and adoption of stablecoins and the White House appears to be also moving in this direction.
Well good luck figuring out Frax and other DeFi stablecoins because they are a whole level of wild innovation up from anything poor Zuck was and is thinking of.
Alan Scott is an expert in the FX market and has been working in the domain of stablecoins for many years. Twitter @Alan_SmartMoney
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