Stablecoins Are Here to Stay – And Regulators Must Get On Board

Stablecoins Are Here to Stay – And Regulators Must Get On Board

The recent collapse of the TerraUSD algorithmic stablecoin has put the popular crypto asset in the spotlight. And its repercussions are only just starting to be felt, from talk of government regulation from US Treasury Secretary Janet Yellen, to Tether temporarily losing its USDT 1:1 peg to the dollar, to an all-time low of US$0.95, and with investors withdrawing more than US$10 billion in the past two weeks.

Kathleen Breitman, a co-creator of the Tezos blockchain, speaking to CNBC on the topic said: “As much as I relish seeing things that don’t make sense fail, there’s always a tinge of like, ‘Are people going to extrapolate from this that everything that’s a stablecoin is unsound?’”

At the same time, a statement from the G7 on May 20 warned that “no global stablecoin project should begin operation until it adequately addresses relevant legal, regulatory and oversight requirements through appropriate design and by adhering to applicable standards.”

Despite recent events stablecoins remain a necessary and popular part of the crypto ecosystem.

Despite recent events stablecoins remain a necessary and popular part of the crypto ecosystem. In a October 2021 report from DBS – Singapore’s largest bank – recognized that “Stablecoins have gained momentum” while also noting concerns about stablecoins to withstand high volatility. In fact, Singapore is no stranger to stablecoin innovation, with the launch of the XSGD pegged to the Singaporean dollar in 2020 by StraitsX, with a market cap of almost US$200 million and records over US$1 million in traded volume on a daily basis it’s the world’s largest non-USD fiat-backed stablecoin. I’m also impressed by the Jarvis Network, which has its own set of stablecoins collateralized with USDC, including SGD in late 2021.

These innovations support Singapore’s leading role as a regional crypto hub, with government and startups working in partnership.

Even after the Terra crash, stablecoins still have a total market cap of over US$160 billion, according to CoinMarketCap, with market leader Tether currently worth around US$73 billion, having surged from just US$4.1 billion at the start of 2020.

That said, Tether has not escaped the current slump unscathed, having lost US$11 billion in vale since its US$84.2 billion on May 11. In a statement on Monday May 23 Tether sounded an understanding note, welcome in the current situation, acknowledging that following its loss of peg that “it’s natural that investors might have questions about what stops USDT from facing a similar fate.” But confirmed it had US$70 billion of collateral. I agree the strength of Tether, compared to most traditional banks, has been its ability to process withdrawal of 10% of its assets in a few days.

Check the fine print

Despite these “collateralized assurances,” the data shows crypto whales leaving Tether for USDC. Not surprisingly these whales regard USDC, as the safer option, bearing in mind USDC reports its assets monthly. However, those same whales might want to check the small print.

Circle claims that each USDC is backed by a reserve dollar, and other “approved investments”, these are not detailed. Indeed, the wording on the Circle website changed from the “backed by US dollars” to “backed by fully reserved assets” by June 2021. The third most popular stablecoin, BUSD, created in 2019 as a collaboration with Binance and Paxos, which grew in market cap of around US$1B at the start of 2021, to over US$14.6 billion at the end of 2021, and is now up to over US$18 billion is I believe another winner from the Terra crash, due in large part due to the security involved with the token. As both regulated by the New York State Department of Financial Services, and publicly audited very month, its likely to benefit from the demand for secure stablecoins going forward.

I’m also heartened by the positive post-Brexit approach to stablecoins from the UK government, which clearly recognizes that stablecoins are here to stay, and we need all governments and regulators to get behind that fact.

As an industry we also need to recognise that algorithmic stablecoins are a “different kettle of fish.”

But as an industry we also need to recognise that algorithmic stablecoins are a “different kettle of fish.” I concur with Chris Burniske’s assessment that while it’s unwise to think they’ll never be a workable algorithmic stablecoin, if such an asset needs to either go up or stay stable to work, then it’s not going to survive the crypto market.

Let’s also not forget in the push to get mainstream adoption of crypto that that also raises the risk of contagion to the wider economy. The problem is if the folks who got hit hardest, the retail investors, who bet on LunaUSD because they were told it was “safe”, decide to pull back from other assets.

That said, a balance needs to be struck in terms of protecting investors, the risk in investing in altcoins is different from that with stablecoins. I’m in agreement that regulation needs to happen, but a balance needs to be struck, in protecting investors, and which also allows for rapid innovation which is key to the success of the crypto industry.

 

Original Source: https://blockhead.co/2022/05/29/stablecoins-are-here-to-stay-and-regulators-must-get-on-board/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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Anndy Lian, Advisory Board Member at Hyundai DAC Spoke at Global DeFi Summit “Do the right thing for DeFi for it to grow.”

Anndy Lian, Advisory Board Member at Hyundai DAC Spoke at Global DeFi Summit “Do the right thing for DeFi for it to grow.”

Anndy Lian, an early adopter of blockchain and cryptocurrency spoke at the Global DeFi Summit on 6 January 2021.

“Decentralized Finance (DeFi) will see a stronger interest from institutional investors this year. The macroeconomic trends of low-interest rate globally will also mean DeFi is more relevant to the companies. Traditional finance world keeps breaking, money and people will be redirected to Defi.” Anndy Lian shared.

What is the fastest-growing DeFi area or trend in 2021?

Defi will continue to grow rapidly in 2021.

A) Staking on Defi will grow faster than in 2020. This is closely linked to Ethereum 2.0. The launch of 2.0 is a critical step towards scaling ETH to a much larger capacity. The shift to POS allows huge amount of wealth to be staked as collateral. I would also think more users will not leave their ETH on exchanges. This then spurred to another observation.

B) I think there will be more Cefi and Defi integration in 2021. We will see integrations in traditional products. Crypto backed derivatives and cross-chain products will hit its peak by Q3 2021. We may also be seeing more crypto proprietary trading in 2021.

What challenges should we expect to arise for DeFi in 2021? Will regulators attempt to restrict or limit it in any way?

The challenges did not change. The reason why Defi grew so fast is due to the flawed financial structure. Governments will step in hard for 2021 but they are still playing a catch-up game. Based on what I know, governments know there are underlying enforcement issues. They are resorting to looking at using on-chain digital id to track and trace and enforce AML but this will again take time.

For example, DeFi lending projects will most likely be regulated in a similar way as financial institutions that offer margin lending. They will also be asked to register as a bank, a non-bank lender or a broker.

In conclusion, Anndy emphasized that we need to work closely together in this ecosystem and do the right thing for DeFi to grow.

Anndy Lian is an early blockchain adopter and experienced serial blockchain entrepreneur who is known for his work in the government sector. He is a best selling book author “Blockchain Revolution 2030” and currently the Advisory Board Member of Hyundai DAC Technology. He plays a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region. Anndy is also part of the Gyeongsangbuk-do Blockchain Special Committee, Government of Republic Korea, together with industry experts such as Brock Pierce.

This event is organised by Gulf Xellence and sponsored by YFDAI. Blockcast.cc is the PR company representing Anndy Lian.

 

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Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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“Hyundai will help jump-start this industry a lot faster”: Anndy Lian, Advisory Board Member of Hyundai DAC

“Hyundai will help jump-start this industry a lot faster”: Anndy Lian, Advisory Board Member of Hyundai DAC

Anndy Lian has recently been appointed as the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group where he looks after the governance and compliance aspects of the business. He is an all-rounded business strategist with more than 15 years of experience in Asia. He has provided advisory across a variety of industries for local, international and public listed companies.

Hdac Technology is a blockchain technology company headquartered in Zug, Switzerland. Founded by Chung Dae-Sun, the company intend to develop and provide a decentralized platform that can satisfy various requirements required in a hyperconnected society through the convergence of core technologies such as IoT, cloud, and big data with blockchain.

“I have joined Hyundai DAC as it is a big brand to reckon with and this is what the blockchain industry needs right now. Blockchain is here to stay and I continue to advocate strongly for this technology, putting up a strong voice to businesses and governments. Movers and shakers like Hyundai who owns a huge ecosystem will help jump-start this industry a lot faster.”

– Anndy Lian told Sarah Robinson, Reporter at Newslookout.

Anndy has been pro-government in his blockchain and crypto journey. He plays a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region. He advises the Secretariat on the latest concepts and applications of blockchain technologies in cybersecurity and IoT network data integrity across smart factories and upskills the Secretariat staff in blockchain technologies as applicable to productivity. APO members include Bangladesh, Cambodia, Republic of China, Fiji, Hong Kong, India, Indonesia, Islamic Republic of Iran, Japan, Republic of Korea, Lao PDR, Malaysia, Mongolia, Nepal, Pakistan, Philippines, Singapore, Sri Lanka, Thailand, and Vietnam.

He is also part of the Gyeongsangbuk-do Blockchain Special Committee, Government of Republic Korea, together with industry experts such as Brock Pierce (Chairman, Bitcoin Foundation) and Alexis Sirkia (Founder of Yellow.com), helping the province to grow using blockchain technologies.

Prior to being active in the blockchain space, Anndy played a leadership role in a not-for-profit and quasi-government linked organizations such as Singapore Business Federation (SBF) and Singapore Institute of International Affairs (SIIA) where he worked alongside policymakers, private sector decision-makers, and experts to create business value propositions for different industries.

His book titled “Blockchain Revolution 2030” and is published by Kyobo Books, the largest bookstore chain in South Korea, shares insights on how blockchain technology plays an important foundation for the Fourth Industrial Revolution.

His blockchain knowledge and work have drawn attention from various international media such as Forbes, Bloomberg, Reuters, Yahoo, Nasdaq, FOX News, The Straits Times, Business Times, ABC News, Singapore Business Review, Asia Business Weekly, CBS News, CNET, ZDNET and more.

Anndy is also the founder, investor, advisor, author and board member to several other companies in Asia and Europe. Most recently, he led a project to become the World’s First Initial Exchange Offering (IEO) on EOS-based Decentralized Exchange.

An avid supporter of incubating start-ups, Anndy has investments in several traditional companies. He has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

 

(This interview is curated by BLOCKCAST.CC and originally published on News Lookout.)

Original Source: https://www.newslookout.com

Author: Sara Robinson

Image Credits: Anndy.com

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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