Tag: Stablecoin

Tether Ventures into Sustainable Energy Production and Bitcoin Mining in Renewable-Rich Uruguay

by Blockchain News

Tether, the company renowned for powering the world’s foremost stablecoin, announced today its ambitious venture into energy production and sustainable Bitcoin mining in Uruguay. The company is expanding its portfolio to include the energy sector, signaling its firm commitment towards energy innovation and the future of cryptocurrency.

This initiative will be implemented in collaboration with a local licensed company in Uruguay. This strategic decision underpins Tether’s aspiration to be a global tech leader, extending its influence beyond the realms of finance and communication.

In light of this announcement, Tether is recruiting experts in the energy sector to bolster its team. The company’s endeavor into renewable energy sources aims to support sustainable Bitcoin mining, thereby contributing towards a secure and robust monetary network globally.

Paolo Ardoino, CTO of Tether, emphasized Tether’s dedication to sustainable practices. He stated, “By harnessing the power of Bitcoin and Uruguay’s renewable energy capabilities, Tether is leading the way in sustainable and responsible Bitcoin mining. Our unwavering commitment to renewable energy ensures that every Bitcoin we mine leaves a minimal ecological footprint while upholding the security and integrity of the Bitcoin network.”

Uruguay, with 94% of its electricity generation from renewable sources such as wind and solar power, offers ideal conditions for this endeavor. The country’s abundant natural resources allow for the establishment of renewable energy infrastructures like wind farms, solar parks, and hydropower projects, guaranteeing a constant supply of clean and environmentally friendly energy.

Capitalizing on Uruguay’s robust energy infrastructure, Tether has found the perfect platform for its Bitcoin mining operations. The reliable grid system, capable of meeting modern industrial demands, ensures Tether’s operations will be both efficient and sustainable.

This latest venture represents a significant milestone where energy and cryptocurrency merge, affirming Tether’s role as a trailblazer at the forefront of technology, sustainable practices, and financial innovation.

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NY Fed New Rules Cast Uncertainty on Circle’s Access to Reverse-Repurchase Program

by Blockchain News

The New York Federal Reserve has updated its guidelines for counterparties looking to participate in its reverse repurchase agreements (RRP), casting uncertainty over Circle’s intentions to access the Fed’s system. The changes to the guidelines could potentially hinder Circle’s chances of gaining access to the Fed’s reverse-repurchase program, where the Fed sells securities to eligible counterparties with an agreement to repurchase them at the maturity date. The Circle Reserve Fund, a money market fund managed by investment management firm BlackRock, is one such 2a-7 fund that is only available to Circle and could be deemed ineligible under the Fed’s updated guidelines.

According to the New York Fed, accessing such a system “should be a natural extension of an existing business model, and the counterparty should not be organized for the purpose of accessing RPP operations.” In other words, the Fed’s program is not intended for entities that are solely organized to access RRP operations. The regulations governing 2a-7 government money market funds are aimed at ensuring that these funds are able to meet potential redemptions by investors in a timely manner. Funds under this category must hold at least 10% of their total assets in daily liquid assets and at least 30% of their total assets in weekly liquid assets.

If approved, Circle would be able to earn interest on excess funds by investing in low-risk Treasury securities, allowing the stablecoin issuer to earn interest and help maintain the stability of its stablecoin, USD Coin (USDC). However, Circle’s access to the Fed’s reverse-repurchase program remains uncertain under the updated guidelines.

It is worth noting that Circle has been expanding its banking partnerships on a global basis since the depeg of USDC following the collapse of Silicon Valley Bank on March 10. The company has also turned its focus to having more banking partnerships to mitigate risks and uphold the redeemability of its coins for holders. Circle announced in November that it had begun investing part of its funds into the Circle Reserve Fund as a measure to mitigate risks and uphold the redeemability of its coins for holders.

Circle’s access to the Fed’s reverse-repurchase program would have allowed the company to further diversify its reserves and treasuries. As of now, Circle holds 80% of its reserves and treasuries. Despite Circle’s expanded ties with BNY Mellon and its new banking partnership with Cross River, the updated guidelines set by the NY Fed have created uncertainty over Circle’s access to the Fed’s reverse-repurchase program. The stablecoin issuer will need to explore other options to ensure the stability and growth of its stablecoin.

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US Crypto Crackdown Hurts USD Coin

by Blockchain News

In an interview with Bloomberg TV, Circle CEO Jeremy Allaire stated that the US regulatory crackdown on cryptocurrencies has been a significant factor behind the decreasing market capitalization of USD Coin (USDC). The regulatory scrutiny on USDC comes after the collapse of the FTX exchange, a banking crisis, and USDC’s depegging.

The USDC depegged in March due to the US banking crisis, which caused Circle’s $3.3 billion worth of USDC reserves to be stuck with Silicon Valley Bank, one of the three crypto-friendly banks that were shut down by regulators. Although Circle had assured its customers that it had the backing from investors to fill the gap, the news caused the market to react quickly, and USDC depegged from the US dollar.

At its peak, USDC had a market cap of $56 billion, placing it right behind Tether-issued USDT. However, since the banking crisis and USDC’s depeg, the stablecoin’s market cap has been reduced nearly by half, currently sitting at $30.7 billion.

Circle CEO Allaire has also raised concerns that the lack of regulatory clarity in the US may force crypto companies to seek opportunities overseas. With the recent passing of the Markets in Crypto-Assets Act (MiCA) by the European Parliament and the push for adoption by Hong Kong, Allaire believes that the US will be left behind.

Allaire has called for Congress to step up, stating that it is a critical moment for the US. The US Securities and Exchange Commission (SEC) led by Gary Gensler has been on an enforcement spree since the FTX collapse saga. The SEC has threatened regulatory action against multiple crypto platforms and exchanges.

During the oversight hearing on digital assets, Gensler faced pushback from policymakers, and many crypto proponents have also questioned the authority of the SEC and Gensler. The regulatory environment in the US has caused uncertainty and concern, leading to a decline in the market capitalization of USDC.

In conclusion, the regulatory crackdown on cryptocurrencies by US regulators has been a significant factor behind the decreasing market capitalization of USDC. Circle CEO Jeremy Allaire has raised concerns about the lack of regulatory clarity and the US banking system’s global reputation. The passing of the Markets in Crypto-Assets Act (MiCA) by the European Parliament and the push for adoption by Hong Kong have put the US at risk of being left behind in the crypto industry. Congress needs to step up and provide regulatory clarity for the US to remain competitive in the evolving crypto landscape.

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Visa New Crypto Initiative

by Blockchain News

Visa, a leading global payment corporation, has announced its latest initiative focused on stablecoin payments. This move is part of the company’s ongoing exploration of the potential benefits of the cryptocurrency industry. Visa’s latest cryptocurrency-related endeavor was unveiled by Cuy Sheffield, the company’s head of crypto, via Twitter on April 24th. Visa made the announcement. A new cryptocurrency product has been developed to promote the extensive use of public blockchain networks and stablecoin transactions.

Visa is on the hunt for software engineers with specialized skills in programming, backend systems, and Web3 technologies. The goal is to create innovative products that simplify digital commerce in our daily lives. The organization is seeking potential employees with prior experience in writing and debugging smart contracts using Github Copilot and other AI-assisted engineering tools. In the latest job posting, the preferred qualifications for the position include a comprehensive understanding of layer 1 and layer 2 solutions, proficiency in writing smart contracts using Solidity programming language, and familiarity with both public and permissioned distributed ledger networks, security protocols, private key custody, and Ethereum enhancements like ERC-4337.

Visa’s venture into the cryptocurrency market in 2020 has led to the development of a new cryptocurrency product. In a recent development, the business has partnered with the blockchain startup Circle to facilitate the integration of the stablecoin USD Coin (USDC) on a specific set of credit cards. In the face of a challenging market for cryptocurrencies in 2022, Visa has reportedly postponed a number of new industry partnerships. Despite the company’s efforts to expand its crypto offerings, setbacks such as the struggles of Celsius and FTX have contributed to a more cautious approach.

Visa has announced a new crypto project, signaling the company’s increasing involvement in the cryptocurrency and blockchain industry. The move also highlights Visa’s desire to promote the widespread adoption of stablecoin payments. Visa’s goal to encourage widespread use of stablecoin payments is a testament to the growing interest and demand for this type of currency. In a recent development, Visa has launched a new cryptocurrency product that is expected to have a significant impact on the growth and progress of the industry. As more companies and individuals begin to recognize the benefits of cryptocurrencies, this latest offering from Visa is poised to play a crucial role in their adoption.

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Terraform Labs Co-Founder Indicted for Terra Stablecoin Collapse

by Blockchain News

The Seoul Southern District Prosecutors’ Office has indicted Shin Hyun-seong, co-founder of Terraform Labs, and nine other individuals for their role in the collapse of the Terra stablecoin ecosystem. The 10 individuals were charged with fraud, breach of trust, and embezzlement after 11 months of investigation, with suspected illicit profits of nearly $350 million.

Shin is accused of misleading investors and falsely advertising the product despite knowing that the project was unfeasible, leading to significant losses. The indictment comes just days after a Seoul district court ruled that the Luna token was not a security and did not fall under the purview of the Capital Markets Act. The court had earlier refused the prosecution’s ten demands of charging Shin for violating security law.

Prosecutors have seized assets worth a total of $180 million from the indicted individuals. This includes assets belonging to Shin, who co-founded Terraform Labs, one of the budding crypto ecosystems that popularized the concept of algorithmic stablecoins. The collapse of the native stablecoin, TerraClassicUSD (USTC), de-pegged from its dollar value in May 2022, and the $40 billion ecosystem came crashing down.

The indictment of Shin and nine other executives comes just a month after former CEO Do Kwon was arrested in Montenegro. Prosecutors in Montenegro indicted Kwon on charges of document forgery, and he is also facing multiple charges of security fraud from the United States Securities and Exchange Commission.

Terra was a prominent crypto ecosystem that offered algorithmic stablecoins, which gained immense popularity. The Terra stablecoin ecosystem’s collapse has raised concerns about the credibility and reliability of stablecoins in the crypto market. Stablecoins are widely used in the cryptocurrency market to hedge against market volatility, and their reliability and stability are crucial for investors.

The indictment of Shin and his associates highlights the need for stricter regulations in the crypto market to prevent fraudulent activities and ensure investor protection. The Korean government has been taking significant steps to regulate the crypto market, with the latest being the amendment of the Act on Reporting and Use of Specific Financial Information to strengthen anti-money laundering regulations in the cryptocurrency sector.

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Terraform Labs co-founder defends against SEC allegations

by Blockchain News

Do Kwon, co-founder of blockchain company Terraform Labs, has defended himself against allegations of fraud brought by the US Securities and Exchange Commission (SEC). Kwon’s lawyers requested the dismissal of the lawsuit, arguing that the SEC’s allegations were unfounded and that US law prohibited regulators from asserting jurisdiction over the digital assets in question.

According to a Bloomberg report, Kwon’s lawyers stated that “US law prohibits the SEC from using federal securities law to assert jurisdiction over the digital assets in this case.” They also claimed that the SEC failed to prove that Kwon had defrauded US investors in connection with the collapse of Terra’s stablecoin, UST.

Kwon’s legal troubles began in March 2022 when he was arrested at Podgorica airport in Montenegro while allegedly attempting to fly to Dubai using fake documents. Following his arrest, both South Korean and American authorities requested Kwon’s extradition. As of now, it remains unclear which country, if any, will be granted their extradition request.

Montenegrin Justice Minister Marko Kovač recently commented on the matter, stating that “determining to which state they will be extradited is based on several factors like the severity of the committed criminal offense, the location and time when the criminal offense has been committed, the order in which we have received the request for extradition and several other factors.”

In addition to defending himself against the SEC’s allegations, Kwon’s lawyers also argued that the UST stablecoin is a currency, not a security. This claim is significant, as US securities law only applies to securities, not currencies.

The collapse of Terra’s UST stablecoin has been a point of controversy for some time. The stablecoin was designed to maintain a stable value of $1, but its value plummeted to $0.85 in late 2021. The collapse reportedly cost investors $40 billion.

While Kwon fights against the SEC’s allegations, another Terraform Labs co-founder, Shin Hyun-Seong, has managed to avoid legal trouble. The Seoul Southern District Court recently denied an arrest warrant for Shin, citing the unconfirmed nature of the allegations and the unlikeliness of Shin being a flight risk or destroying evidence.

In conclusion, the legal proceedings against Do Kwon and Terraform Labs are ongoing, and it remains to be seen how the case will be resolved. However, Kwon’s lawyers’ defense against the SEC’s allegations suggests that there may be significant legal challenges ahead for the regulatory agency.

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Terraform Labs Co-Founder Argues Against SEC Lawsuit

by Blockchain News

In recent news, Terraform Labs co-founder Do Kwon’s lawyers have made arguments in court against the US Securities and Exchange Commission’s (SEC) lawsuit alleging that Kwon illegally offered unregistered securities to US investors. Kwon’s lawyers have requested the lawsuit be dismissed, citing that US law prohibits regulators from using federal securities law to assert jurisdiction over the digital assets in the case. According to Bloomberg, the lawyers also claim that the SEC has failed to prove that Kwon defrauded US investors in connection with the $40 billion collapse of TerraUSD (UST) and Luna (LUNA) cryptocurrencies. The lawyers argue that the stablecoin in question is a currency and not a security.

The legal proceedings began when Kwon was arrested in Podgorica airport, Montenegro, on March 23, while attempting to fly to Dubai using fake documents. Following his arrest, both South Korean and American authorities requested the entrepreneur’s extradition. At present, it is unclear which country, if any, will be granted the extradition of Kwon.

The Seoul Southern District Court recently denied an arrest warrant for Terraform Labs co-founder Shin Hyun-Seong. Although prosecutors saw Kwon’s arrest as an opportunity to apprehend Shin, the court denied the request citing unconfirmed allegations and the unlikeliness of Shin being a flight risk or destroying evidence.

Montenegrin Justice Minister Marko Kovač, through an interpreter, stated that determining to which state Kwon would be extradited would be based on several factors such as the severity of the committed criminal offense, the location and time when the criminal offense was committed, the order in which the request for extradition was received, and several other factors.

Terraform Labs, which is behind the development of the Terra blockchain and several stablecoins, has gained attention in the cryptocurrency industry in recent years. The company has been working on a variety of projects, including an online marketplace and decentralized finance applications. The SEC lawsuit against Kwon is just one of several legal battles that the company has been involved in, including a lawsuit filed by the South Korean financial watchdog against the company’s stablecoin, Terra.

In conclusion, the legal battle between Do Kwon and the SEC is ongoing, and the outcome remains uncertain. However, Kwon’s lawyers’ arguments that the stablecoin in question is a currency and not a security may have implications for the broader cryptocurrency industry. Additionally, the issue of Kwon’s extradition remains unresolved, and it is unclear which country, if any, will be granted the request for his extradition. The Terraform Labs legal battles highlight the regulatory challenges faced by the cryptocurrency industry as it continues to grow and develop.

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BTG Pactual Launches Stablecoin Backed by USD

by Blockchain News

The Brazilian investment firm BTG Pactual has revealed that it would be releasing its very own stable currency, which will be known as BTG Dol. The bank’s custody services will be required in order to have access to the stablecoin, which will have a one-to-one correlation with the US dollar as its backing. This action is in line with a trend that has been seen by major financial institutions all over the globe to provide cryptocurrency services to their respective client bases.

The customers of BTG Pactual will have a simple and risk-free method of investing in dollars thanks to the stablecoin that the company has developed. According to André Portilho, who is the head of digital assets at the bank, the stablecoin will make it possible for consumers to “dollarize” a piece of their equity, which will make it easier for conventional finance and the digital economy to engage with one another.

There is a subset of cryptocurrencies known as stablecoins. The value of a stablecoin is tied to the value of an underlying asset, such as the US dollar or gold. In contrast to conventional cryptocurrencies like Bitcoin, which are notorious for their price swings because to their lack of centralized control, this gives the value of the cryptocurrency some degree of predictability.

The decision made by BTG Pactual to develop its own stablecoin comes at a time when interest in cryptocurrencies is continuing to increase on a global scale. Stablecoins offer a more stable option for those who wish to invest in cryptocurrencies but are hesitant due to the high volatility that is associated with traditional cryptocurrencies. As a result, the use of stablecoins has become increasingly popular in recent years. This is because stablecoins offer a more stable option.

The bank has a bigger aim to integrate digital assets into its services, and the introduction of BTG Dol is a component of that ambition. In the last several years, BTG Pactual has made significant strides in broadening the scope of the cryptocurrency services it provides via the establishment of a cryptocurrency exchange as well as a digital asset investment fund.

In general, the entry of BTG Pactual into the field of stablecoins is illustrative of the growing interest in cryptocurrencies among big financial organizations. With the introduction of BTG Dol, the bank is giving its customers a more secure and reliable choice for investing in the digital economy than they previously had.

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Bermuda Remains Committed to Crypto Despite FTX Collapse

by Blockchain News

Bermuda’s Premier and Finance Minister, Edward Burt, has affirmed the territory’s commitment to digital assets and blockchain technology, despite the collapse of crypto exchange FTX in nearby Bahamas in November 2022. Burt believes that the future of finance is digital, and there are still considerable benefits to be gained from these technologies. He noted that regulations in Bermuda have a minimal impact on the territory, and the regulations are clear and won’t change for any company.

Bermuda, a self-governing territory with a parliamentary government, was one of the first places to implement a regulatory framework for digital assets. It is just 915 miles away from the Bahamas, where FTX once operated, and Burt reportedly faced intense political pressure before the exchange’s failure as it chose the Bahamas instead of Bermuda for its headquarters. However, according to Burt, the latest events in the crypto industry had a minimal impact on the territory thanks to its regulations.

Burt recently met with United States lawmakers and government officials in Washington to discuss common standards for digital assets, as well as topics related to Bermuda’s finance and insurance sectors. He believes that regulators worldwide must work together to provide clarity for emergent technologies.

Despite the challenges, Bermuda continues to show a strong interest in digital assets. The territory recently released its first stablecoin, powered by the Polygon blockchain, in December 2022. The stablecoin focuses on enabling real-time settlements using a stablecoin with a 1:1 peg to the U.S. dollar.

Bermuda’s regulatory framework for digital assets has made it an attractive destination for crypto and blockchain companies. The territory’s government is actively encouraging companies to set up shop there and has implemented measures to streamline the registration process. In addition to the regulatory framework, Bermuda has a strong infrastructure, including high-speed internet, and skilled professionals in finance and technology.

Burt’s affirmation of Bermuda’s commitment to digital assets and blockchain technology is a positive sign for the crypto industry, which has faced significant regulatory challenges in recent years. The territory’s stable regulatory framework and commitment to innovation demonstrate that there are places where crypto and blockchain companies can thrive while adhering to regulations.

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MakerDAO Keeps USDC as Primary Collateral for Dai

by Blockchain News

Since there is a possibility of hazards being linked with USDC, the MakerDAO Risk Core Unit recently proposed the notion of diversifying the collateral for Dai. This suggestion was made as a response to the proposal. Nonetheless, MKR holders voted decisively in support of maintaining USDC as the major collateral for Dai. With a vote of 79.02% in favor of expanding the USDC-to-DAI minting capacity and decreasing the cost to 0%, MKR holders voted in favor of retaining USDC as the primary collateral for Dai.

Due to USDC’s “possibly more dangerous exposure to uninsured bank deposits” and “a weaker legal framework” in comparison to its rivals, the suggestion advised diversifying collateral into GUSD and USDP. Nevertheless, according to the Risk Core Unit, the risks that are connected with utilizing USDC as collateral have dramatically diminished from the previous week. This information was provided by the Risk Core Unit.

When a string of failed banks forced the USDC to briefly lose its $1 peg, the decision was made to maintain USDC as the principal collateral for Dai transactions. In response to this, MakerDAO has introduced efforts to prevent Dai from being undercollateralized. These actions include increasing the charge to mint Dai using USDC as collateral from 0% to 1%, as well as lowering the daily minting cap for this procedure.

A vote of confidence in the stability of the USDC stablecoin and its capacity to retain its $1 peg can be inferred from the fact that USDC will continue to serve as the principal collateral for the Dai cryptocurrency. Yet, this does bring up concerns about the possible hazards that are connected with placing a significant amount of reliance on a single collateral item.

It is quite possible that new discussions and disputes around collateral diversification will continue to emerge inside decentralized autonomous organizations such as MakerDAO as the cryptocurrency market continues to expand and stablecoins become more widely used.

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