Search results for stablecoins

  • Are Stablecoins Really Stable? Here's Your ROI On $1 Worth Of 3 Stablecoins

    Stablecoins represent a class of cryptocurrencies that are meant to preserve value over time. Unlike traditional cryptocurrencies, stablecoins obtain their value from an underlying asset or algorithm. Fundamentally, stablecoins are either algorithmic or collateralized. Stablecoins that are collateralized or asset-backed can have on-chain collateral, in the form of cryptocurrencies, or off-chain collateral, such as fiat reserves. There are also commodity-backed stablecoins that use commodities, such as real estate, oil, or precious metals, as collateral. Finally, algorithmic stablecoins seek to gain price stability via smart contracts and algorithms, that control the token’s circulating supply. Over the past few months, stablecoins have been under harsh criticism due to the infamous de-pegging of Terra’s (CRYPTO: LUNA) algorithmic stablecoin TerraUSD (CRYPTO: UST). Terra founder Do Kwon proposed the Anchor program, which promised UST investors an 18% APY. Despite warnings of its failure, Kwon continued with its launch, which lead to its inevitable de-peg. As a result of the stablecoin’s downfall, Terra investors globally lost over $60 billion. Alongside UST, Tron’s (CRYPTO: TRX) stablecoin USDD (CRYPTO: USDD) has also been de-pegged over the past few weeks. On June 19, USDD reached an all-time low, trading at $0.925. It has now stabilized up to $0.9865. Also Read: If You Invested $1,000 In Shiba Inu At Its COVID-19 Pandemic Low, Here's How Much You'd Have Now Tether (CRYPTO: USDT) is another stablecoin that has been under public questioning, for its apparent lack of collateral reserves and commercial paper holdings. The stablecoin has seen large-scale liquidations, as the crypto market has continued its downtrend. $1 invested into UST at the time of its launch would currently be worth $0.028, giving a negative return on investment of 97.2%. Furthermore, $1 invested into USDD at its launch would currently be worth $0.9862, giving a negative return on investment of 0.0138%. Tether is currently holding price stability, trading at $0.99. Thus, only giving initial investors are marginal negative ROI. An important use case for stablecoins to consider is its staking and lending benefits. Therefore, certain stablecoins may be a few points down but could have provided investors larger rewards on staking returns. Thus, following the black swan event of UST, investors globally are shifting their interests to safer stablecoins, with underlying assets and collaterals. © 2022 Benzinga does not provide investment advice. All rights reserved.

  • Traders, Major Hedge Funds Short USDT As Uncertainty Around Stablecoins Rise

    Numerous cryptocurrency trading hedge funds have opened major short positions on Tether (CRYPTO: USDT). What Happened: According to CoinDesk, digital currency broker Genesis stated that following Terra’s (CRYPTO: LUNA) downfall due to UST’s (CRYPTO: UST) de-peg, numerous short positions for Tether have opened. There has been extreme fear, uncertainty, and doubt injected into the market on the reliability of Tether. The collateralized reserves supporting Tether have been questioned by investors globally. Furthermore, Tether was questioned for apparent commercial paper holdings and a rumoured affiliation with insolvent firm Celsius. Despite having dispelled false rumours by providing on-chain data about reserves, major cryptocurrency trading funds have opened short positions on Tether. Why It’s Important: Major funds, including Fir Tree Partners and Viceroy Research LLC, have formerly shorted Tether. Following the de-peg of UST, there is extreme market angst surrounding stablecoins, such as Tether. Despite the same, Tether has publicly addressed hearsay regarding commercial paper holdings, their collateralized reserves, and the major scale deleveraging occurring. A Tether official, with regard to short sellers in the stablecoin market, deemed it to be a "clever scheme to raise capital from those less knowledgeable, by leveraging on disinformation with the end goal of collecting a management fee." As market uncertainties continue, Tether must protect its peg against short-sellers, market rumours, and major liquidations experienced across the sector. © 2022 Benzinga does not provide investment advice. All rights reserved.

  • Not So Stable Stablecoins – USDD Hits All Time Low

    The stablecoins are going low and belong to their peg. The market cap of stablecoin as of now is above

  • BIS Innovation Hub to create platform addressing collapse of stablecoins, DeFi lenders

    The hub's Eurosystem Centre will open locations in Frankfurt and Paris and work with all 19 euro area central banks and the European Central Bank. The post BIS Innovation Hub to create platform addressing collapse of stablecoins, DeFi lenders appeared first on The Block.

  • Tether stablecoins now available on the Tezos blockchain ecosystem, the company operating the blockchain-enabled stablecoin platform, announced it will launch Tether tokens on Tezos, the upgradable proof-of-stake  (PoS) blockchain. “We’re excited to launch USD₮ on Tezos, offering its growing and vibrant community access to the most liquid, stable, and trusted stablecoin in the digital token space. Tezos is coming fast onto the scene […] The post Tether stablecoins now available on the Tezos blockchain ecosystem appeared first on CryptoNinjas.

  • New York Finance Regulator Issues Fresh Guidance on Dollar-Backed Stablecoins

    The New York State Department of Financial Services became America’s first regulator to issue regulatory guidance for dollar-backed stablecoins.

  • New York’s financial regulator issues new guidance on dollar-backed stablecoins

    The New York Department of Financial Services introduced new policies aimed at protecting stablecoin investors. The post New York’s financial regulator issues new guidance on dollar-backed stablecoins appeared first on The Block.

  • US Bipartisan Legislation Looks To Regulate Stablecoins And Protect Investors Following Terra Crash

    With the bipartisan support of Sen. Kirsten Gillibrand (D-NY) and Sen. Cynthia Lummis (R-WY), the Responsible Financial Innovation Act was proposed earlier today. Alongside a number of regulatory clarifications presented in the legislation, one major component is its endeavor to regulate stablecoins by establishing “100% reserve, asset type and detailed disclosure requirements for all payment stablecoin issuers.” What Happened: The legislation proposes that the holder of a particular stablecoin must be able to encash it in lieu of the equivalent value in U.S. dollars at any point in time. Furthermore, the bill seeks to protect consumers and investors by ensuring stablecoins stay at their dollar value. It further presents a model including credit unions and banks that may opt into participating in order to supply stablecoins. Therefore, the regulatory clarity presented around stablecoins secures and protects retail and institutional investors. Why It's Important: Following the major crash of Terra (Crypto: LUNA) as a result of the de-peg of its stablecoin, the algorithmic backing of stablecoins has been majorly in question across the world. Retail investors, organizations and legal bodies have looked into the $60 billion dollar loss suffered globally and confidence in stablecoins has majorly diminished. By setting regulations around stablecoins, such as guaranteed dollar conversion and assigning banks issuing power, this legislation allows investors to be protected from unpredictable crashes, such as that in the case of Terra. What’s Next: As the bill must work its way through the U.S. Congress, the future of these regulations being guaranteed remains uncertain. However, the severe crash of Terra may usher in a new generation of stablecoins that work on reserves and collateralization, as opposed to algorithms. The approval of this legislation would formalize the protection of investors in stablecoins from any algorithmic mistakes. Photo: iQoncept via Shutterstock © 2022 Benzinga does not provide investment advice. All rights reserved.

  • A Step Forward In Crypto Adoption: Accepts Stablecoins

    An online payments company allows merchants to settle payments in stablecoin. This feature enables merchants to pay using USDC. The

  • Leaked Crypto Bill Suggests US To Go After DeFi, DAOs, Stablecoins: Community Reacts

    A leaked copy of the new bipartisan Senate bill appears to favor a much tighter regulatory environment for cryptocurrency assets. What Happened: A June 3 Barrons report details a revised bill put forward by Senators Cynthia Lummis and Kirsten Gillibrand. The oversight of the cryptocurrency industry would be split between two U.S. regulators: the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). After incorporating industry feedback, the new version of the bill broadens the definition of tokens under the SEC’s jurisdiction, but only courts will be able to make exceptions to the presumption that a token is a security. The Fine Print: “The bill clarifies the universe of digital tokens that would fall under the SEC’s jurisdiction. The latest draft restricts the SEC’s authority instead of expanding it,” said a spokesperson for Lummis to Barrons. The CFTC would oversee trading in spot markets. The draft bill also puts forth recommendations for enhanced decentralized finance (DeFi) and decentralized autonomous organization (DAO) regulation.  It broadly classifies fungible tokens as securities while making a case for non fungible tokens (NFTs) to be an entirely new asset class. Online reactions: The crypto community weighed in on the leaked copy of the draft bill as it began making the rounds on social media. Big takeaways on this. Regulated Exchanges, Fungible Tokens are Securities, NFTs are a new class of asset, Stable coins must back 100% of their value in the currency they are stabilized by, DeFi regulation incoming in 1 year, US committee for the digital dollar. — Leyens (@Leyens_OS) June 7, 2022 In fact, the language of the bill is so broad, that people could start a whole business of mining/staking crypto assets, hold them until death (and in the meantime borrow/short them against the box), and never ever pay tax on them. — Omri Marian  (@Omri_Marian) June 6, 2022 looks like the new US crypto bill that has been leaked goes hard after shit tokens, DAOs, DeFi, stablecoins, and exchanges — Shibetoshi Nakamoto (@BillyM2k) June 7, 2022 yeah most “projects” make no attempt to be complaint since they’re not legit in the first place — Shibetoshi Nakamoto (@BillyM2k) June 7, 2022 The SEC had previously ruled that Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) are not securities but has brought enforcement actions for alleged “unregistered securities offerings” to XRP (CRYPTO: XRP) issuer Ripple, and more recently, Binance for its native token Binance Coin (CRYPTO: BNB). © 2022 Benzinga does not provide investment advice. All rights reserved.

  • New U.S. Crypto Bill Leaked: Tougher Stance on DAOs, DeFi, Stablecoins, and Exchanges

    On Monday, June 6, crypto Twitter was thrown into a frenzy after a leaked 600-page document, allegedly the new crypto bill of the U.S., started making rounds on the micro-blogging platform. Continue reading New U.S. Crypto Bill Leaked: Tougher Stance on DAOs, DeFi, Stablecoins, and Exchanges at