In this issue:
• US Banks Launch New Stablecoin, Data Shows Increasing Interest in Crypto
• With New Acquisitions and Partnerships, NFT Marketplaces Continue to Expand
US Banks Launch New Stablecoin, Data Shows Increasing Interest in Crypto
In a recent press release, an association of FDIC-insured financial institutions announced the launch of the USDF Consortium (Consortium). The Consortium’s goals include building a network of banks to foster the adoption and interoperability of a bank-minted stablecoin (USDF). According to the release, USDF will be minted exclusively by U.S. banks, will be redeemable on a 1:1 basis for cash from member banks and offers an alternative to non-bank-minted stablecoins. The press release also notes, among other things, that USDF “operates on the public Provenance Blockchain” and “addresses the consumer protection and regulatory concerns of non-bank-issued stablecoins.”
In other stablecoin news, a report this week announced that the total supply of the stablecoin USD Coin (USDC) on the Ethereum network has surpassed the supply of Tether, another stablecoin. The report further acknowledges that there have been concerns about the transparency of the coins, noting that there have been ongoing questions as to how Tether is collateralized and how its reserve funds are managed. According to the report, in comparison with Tether, the reserves behind USDC fully moved this year to cash and U.S. Treasury bonds.
According to recent reports, a well-known auction house expects to accept bitcoin and ether, as well as the stablecoin USDC, in connection with the sale of a rare, 555-carat black diamond called the Enigma. The auction house reportedly had success accepting cryptocurrency as payment in a previous diamond auction, and it hopes to lead interest in that market given the strong cryptocurrency community.
Recently published data indicates increased interest in cryptocurrencies. One recent report found that nearly 70 percent of cryptocurrency holders in the United States made their first cryptocurrency investment within the past year. The same report also noted that the majority of the 3,100 adults polled indicated that they held less than $10,000 of cryptocurrency. According to a different survey, almost two-thirds of the respondents identified as “crypto-bulls,” with nearly as many indicating that they expect to buy cryptocurrency in 2022.
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With New Acquisitions and Partnerships, NFT Marketplaces Continue to Expand
One of the largest non-fungible token (NFT) marketplaces has reportedly surpassed $3.5 billion in ether trading volume this month. According to reports, the rise in trading volume may be attributable to the rise in price of sought-after NFT collections such as Bored Ape Yacht Club. Additionally, the platform recently reported the acquisition of a cryptocurrency wallet firm, which will allow the marketplace to integrate the acceptance of transactions from additional financial institutions as well as new blockchains.
In other NFT news, a partnership between a major-league ball club and an NFT marketplace, which had previously allowed for initial NFT sales only, recently reported it had opened its platform to secondary market trading. The new revenue stream has reportedly generated approximately $2 million per day for the platform, rivaling that of other top NFT marketplaces selling sports memorabilia.
Responding to increased market interest in NFTs, a major U.S. cryptocurrency exchange has reportedly partnered with a major U.S. financial services platform to make NFTs more accessible and easier to purchase. According to reports, the new venture aims to “simplify the user experience” and allow more consumers to “join the NFT community.”
Last week a new decentralized NFT marketplace launched, with reported sales volume rivaling that of established marketplaces. However, according to recent reports, much of that volume may be attributable to wash trading – where traders manipulate the marketplace to their own advantage – rather than to organic purchases on the platform.
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Acting Comptroller of the Currency Promotes Stablecoin Regulation
Last week, acting Comptroller of the Currency Michael J. Hsu spoke before the BritishAmerican Business Transatlantic Finance Forum’s Executive Roundtable, where he encouraged increased stablecoin regulation in the wake of mainstream cryptocurrency adoption. In his remarks, Hsu described stablecoins as the “oxygen of the crypto ecosystem” and a “key link to the fiat currency world” that warrants regulation to protect the investing public and the markets against financial instability caused by “runs” (where spooked investors withdraw their holdings en masse, potentially resulting in financial collapse). Hsu used a crypto-analogy to promote increased stablecoin regulation as he reminded his audience that the Office of the Comptroller of the Currency was created to facilitate national financial stability and […]
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