Will XRP’s Primary Competitor Outperform Crypto Markets in 2022? Coin Bureau Updates Outlook on Stellar Lumens (XLM)

The host of crypto channel Coin Bureau is unveiling his outlook for Stellar (XLM) next year after the XRP competitor’s lackluster performance in 2021.

In a new video, pseudonymous analyst Guy tells his 1.78 million YouTube subscribers that while Stellar (XLM) doubled in price this year, the altcoin’s gains are “peanuts” compared to the performance of other crypto assets.

According to Guy, Stellar’s poor price performance can be traced to one key reason: sell pressure, specifically from the Stellar Development Foundation (SDF), a non-profit organization dedicated to the development and growth of the Stellar network.

“The foundation only received $3 million at its inception. To my knowledge, it hasn’t received any additional funding since then. This means that the foundation has been relying on its sales of XLM to pay its expenses and fund the expansion of Stellar’s ecosystem, and this isn’t speculation either. The foundation’s XLM  spending is clearly detailed on its mandate page, and I applaud it for its transparency.

The latest figures suggest that the foundation has spent over 5 billion of its 30 billion XLM so far, and the way back machine reveals that about 3 billion of this XLM were spent over the last year.

What’s more is that a paragraph at the end of the mandate notes, ‘as we said when we first announced this framework in November 2019, we intend to use or disperse most of these Lumens within 10 years, ideally sooner.’ In other words, the sell pressure isn’t going to stop any time soon.”

Guy also says that on top of the sustained selling pressure, XLM does not appear to have many demand drivers. Institutional investors are shying away from the crypto asset possibly due to the regulatory uncertainty related to XRP, according to the crypto analyst.

However, Guy says that favorable results from SDF’s partnership with MoneyGram may allow XLM to get back to its January 3rd, 2018 record high of $0.87.

In October, the remittance giant announced that it is integrating the Stellar blockchain into its network, enabling cash funding and payouts in local currency for consumers using Stellar USD Coin (USDC).

“The only demand for XLM is coming from the institutions the Stellar Development Foundation has partnered with and these partnerships are only starting to reach their final form. On the bright side, this paints a pretty bullish picture for XLM in 2022, and I could see XLM re-testing its early 2018 highs if its MoneyGram partnership delivers on its promises. Stellar also has no shortage of upcoming milestones, which could attract both retail and institutional interest.”

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How Stellar Will Host Ukraine’s CBDC Pilot Test With Tascombank

The Stellar Development Foundation (SDF) has been working with the Ukrainian government on their national Central Bank Digital Currency (CBDC) for a while. The collaboration has started to produce results as the SDF, Bitt, and TASCOMBANK recently deployed a pilot project for the electronic hryvnia on this network.

Related Reading | An Introduction To Stellar And XLM: Mission, Control, And Consensus

Per a press release, the partners will test the CBDC’s use cases and its programmable capabilities. These will be leveraged to pay employees at a company called Diia, and to perform payments to merchants and individuals.

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According to the release published by Bitt, the project has been under the supervision of the National Bank of Ukraine aided by their Ministry of Digital Transformation. In that sense, Ukraine’s Deputy Minister of Digital Transformation, Oleksandr Bornyakov commented the following on their CBDC’s test phase:

This pilot project will serve as a technological basis for the issuance of electronic money and is the next key step to advance innovation of payment and financial infrastructure in Ukraine.

During the trial on Stellar, the partners will also test the capacity to issue digital currency with “asset-control capabilities for issue”s”. The banking institution will be in charge of testing the implementation of the hryvnia on Bitt’s Digital Currency Management System (DCMS).

The latter company has been in charge of developing a stablecoin with its payment rails for the National Bank of Belize, and it’s behind the Eastern Caribbean Central Bank (ECCB) initiative to launch a CBDC. The target for this project, per its official website, is to increase “opportunities for financial growth”.

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Similar to this project, the digital hryvnia will use the “moderns software techniques” and alleged scalable and performant benefits from the DCMS. This system will “protect” the user’s data while regulatory bodies still can access “needed” information, the official website adds the following on their DCMS:

Security is designed-in, to use secure defaults, minimize attack surfaces and provide defense-in-depth. Independent modules allow each component to scale independently of others, allowing automatic adjustment to meet variable demands.

Stellar Spearheads Ukranian Initiative

With its DCMS system Bitt will provide secure minting, currency manager, and a monetary transaction network. Thus, tackling three of the most important items in every CBDC project. Volodymyr Dubey, Chairman of the for TASCOMBANK, said:

Cooperation with Bitt to build on Stellar allows us to connect our core banking system with blockchain-based infrastructure, creating an ecosystem that includes a full range of banking products and operations with electronic currency on the Stellar blockchain.

Dubey also expressed excitement to improve the country’s financial products by using virtual assets. The Ukranian Central Bank and TASCOMBANK have long-term strategies that include innovation supported on blockchain technology and the digital economy.

Executive Director and CEO of the Stellar Development Foundation Denelle Dixon added the following:

Stellar is an open network that was designed with asset issuance in mind, and is uniquely suited to assets like the electronic hryvnia. It offers issuers, like TASCOMBANK, a suite of controls that they can configure for their asset control needs while maintaining the interoperability and flexibility of an open ledger.

Related Reading | Stellar To Launch New Europe-Africa Payment Corridor With This Partner

As of press time, XLM trades at $0,26 with a 2.9% loss in the past 24 hours.

XLM on a downtrend in the 4-hour chart. Source: XLMUSDT Tradingview


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Crypto in the House: Execs on the march, US partisan politics and Web3

On Dec. 8, top executives from six major crypto companies faced the United States House of Representatives’ Financial Services Committee during a special hearing on digital assets. While the tone of the conversation was largely proclaimatory, the industry reacted with an optimistic buzz — it seems that crypto is bound to become a hot topic on the Hill for years to come.

The meeting that took place in Congress also garnered much attention from mainstream media. What’s notable is the fact that this hearing is the first time that the industry’s senior leaders (aka “crypto moguls”) directly expressed the fears and hopes of the $2.2-trillion sector to U.S. legislators.

The industry representatives who were summoned to testify at the hearing included Jeremy Allaire, CEO of Circle; Sam Bankman-Fried, CEO of FTX; Chad Cascarilla, CEO of Paxos; Denelle Dixon, CEO of the Stellar Development Foundation; Brian Brooks, CEO of Bitfury; and Alesia Haas, chief financial officer of Coinbase.

Some of the key legislators who actively engaged with the crypto industry captains were Representative Pete Sessions, a Republican from Texas; Rep. Maxine Waters, a Democrat from California; Rep. Gregory Meeks, a Democrat from New York; Rep. Brad Sherman, a Democrat from California; Rep. Patrick McHenry, a Republican from North Carolina; Rep. Blaine Luetkemeyer, a Republican from Missouri; and Senator Sherrod Brown, a Democrat from Ohio. 

So, here’s how it went down on the big day.

Key arguments

Allaire supported this point with an example from his firm’s operations: “Just in the past several weeks, Circle has signed on institutional customers who are using these services for small-business payments, international remittances and efficient payments for remote workers.” As he optimistically stated, soon “Dollars on the internet will be as efficient and widely available as text messages and email.”

Brooks took the message even closer to key political tensions of the day as he emphasized the opposition between tech behemoths such as Meta (formally Facebook) and the decentralizing impulse of crypto:

At the center of the CEOs’ narrative was the humanitarian significance of digital assets and their developmental potential. Cascarilla framed crypto as a “really powerful tool for democratization of access.” 

The point of crypto is to have true decentralization, and the projects that succeed will be the projects that achieve that. Bitcoin succeeded because there were literally millions of participants in the node network, and so there is no CEO of Twitter to deplatform you, there’s no CEO of JPMorgan to take away your credit card.

It was also Brooks who laid out the powerful promise of the blockchain-powered Web3 era. 

Aside from the fiery rhetoric, the message from the industry leaders was crisp and straightforward: It’s about time to bilaterally reconsider the rules of the game and put an end to the government’s suspicious paternalism. The industry is still being overseen by several federal agencies, state-by-state regulation is a mess, and the Securities and Exchange Commission is trying to hold its grip, characterizing digital assets as securities.

The last point was clearly emphasized as the main problem: Coinbase’s Haas proposed deeming blockchain-based tokens as digital property or a way to record ownership, which would put them outside of the SEC’s jurisdiction.

Brooks didn’t spare words when highlighting the dysfunctional patterns of the current situation: “What happens in the United States is you have a new crypto project, and you walk into the SEC, and you describe it in great detail, and you ask for guidance, and they say, ‘We can’t tell you’ and ‘You list it at your own peril.’”

Political divisions

The Dec. 8 hearing once again brought out a division regarding crypto-related issues that exists along party lines. Democrats focused their attention on investor protection and volatility, framing the industry as a potential threat to both uninformed investors and the global economy (environmental concerns were also mentioned.)

“Currently, cryptocurrency markets have no overarching or centralized regulatory framework, leaving investments in the digital assets space vulnerable to fraud, manipulation and abuse,” as Waters, who chairs the Financial Services Committee, put it.

Related: Lines in the sand: US Congress is bringing partisan politics to crypto

Sherman, one of the industry’s most consistent critics, expressed this anxiety in a quite vague, if not cryptic, form: “The powers in our society on Wall Street and in Washington have spent millions, and are trying to make billions or trillions, in the crypto world.” 

Republican legislators, who — following a decades-old pattern of the American electoral system — are projected to win the majority in Congress in the next midterm elections, demonstrated a pragmatic approach.

In the words of McHenry, who is poised to chair the Financial Services Committee if the GOP wins back the House:

This technology is already regulated. Now, the regulations may be clunky, they may not be up to date. I ask my friends, my policymaker friends here on the Hill, this question: Do you know enough about this technology to have a serious debate?

Sessions went even further and gave an outright cheer to the industry, uttering a promise to support it: “I am tremendously impressed that from what I see, a lot of the ingenuity, a lot of entrepreneurial spirit, and lots of advice about the future, about where this can grow, is, I think, very important for us to listen to.”

Industry response

Despite certain disagreements between legislators, the hearing sparked a largely positive reaction from the crypto community, with Jake Chervinsky, head of policy at the Blockchain Association, calling it “the most positive, constructive, & bipartisan public event on crypto I’ve seen in Congress” and other experts largely projecting similar vibes.

Some representatives also projected an empathic epigraph in the aftermath of the hearing. Perhaps the most eloquent reaction belongs to Meeks, who demonstrated a moderate optimism toward the industry’s future:

The silence of crypto critic Sherman, normally an active Twitter user, was also notable.

What’s next

The overall optimistic mood of the hearing stands in contrast to some of the recent regulatory actions taken by the U.S. government. For one, the SEC denied WisdomTree’s application for a spot Bitcoin exchange-traded fund after seven months of consideration, keeping it impossible to invest in a regulated financial product providing direct exposure to the world’s oldest cryptocurrency.

Surely, the hearing will not be the last turn in the crypto-government conversation, even for 2021. Already, a hearing on stablecoins took place before the Senate Banking, Housing and Urban Affairs Committee on Dec. 14.

As Representative McHenry put it, “Congress must work to fully understand and embrace these innovative new technologies, like #crypto.” It looks like everyone should brace for a busy 2022 in crypto policy and regulation.