Tag: USD

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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DTCC to Build Prototype Supporting US Digital Dollar in Clearing & Settlement Process

by Blockchain News

The Depository Trust & Clearing Corporation (DTCC), a US post-trade financial services company providing clearing and settlement services to the financial markets, announced on Tuesday that it is developing the first prototype in the industry to examine how a Central Bank Digital Currency (CBDC) might operate in the U.S clearing and settlement infrastructure using distributed ledger technology (DLT).

The prototype, known as Project Lithium, will explore the benefits of a CBDC and inform the future design of the company’s clearing and settlement offerings. Furthermore, DTCC said that the prototype will examine how a CBDC could enable atomic settlement, a conditional settlement that happens if delivery and payment are both received at the same time.

DTCC is developing the Project Lithium pilot through a partnership with ‘The Digital Dollar Project,’ a non-profit led by former U.S. regulators, prominent tech leaders and executives from the consulting firm Accenture.

The aim of the prototype is to demonstrate the direct, bilateral settlement of cash tokens between participants in real-time delivery-versus-payment (DVP) settlement. The pilot will also examine how it can leverage DTCC’s robust clearing and settlement abilities to fully realize the potential benefits of a CBDC, including increased capital efficiency, guaranteed delivery of cash and securities, a more efficient, automated workflow, reduced counterparty risk and trapped liquidity, and enhanced transparency to regulators.

With initial funding from Accenture, DDP continues organizing a series of retail and wholesale pilots to assess how a CBDC might work across the American social landscape and the U.S. financial infrastructure.

Jennifer Peve, Managing Director, Head of Strategy and Business Development at DTCC, talked about the development and said: “DTCC has for several years been experimenting, engaging and leading the conversation around the digitization of financial markets, and Project Lithium represents the next major step in our exploration of DLT, tokenization and other emerging technologies. Project Lithium will lay the groundwork for the financial community to better evaluate the implications of a CBDC across the trade lifecycle, as interest in this style of funding continues to grow.”

Meanwhile, J. Christopher Giancarlo, co-founder and Executive Chairman of The Digital Dollar Project and former chairman of the CFTC, also commented on the development and stated: “A CBDC could improve time and cost efficiencies, provide broader accessibility to central bank money and payments, and all while emulating the features of physical cash in an increasingly digital world. We thank DTCC for their partnership in the first of a series of pilots and their deep commitment to helping the financial community better understand and realize the potential advantages and challenges of a U.S.-backed digital currency.”

Digitizing Securities and Capital Markets

As the markets evolve and become more digitized, the use of fiat currency continues to decline while the adoption of tokenized securities rises at a rapid pace.

Project Lithium is the latest effort by DTCC to continue leading the industry toward greater digitalization. The move by DTCC comes a few weeks ago U.S. President Joe Biden issued an executive order directing the Treasury Department and Federal Reserve to look into a potential CBDC.

In June 2020, DTCC launched a Project Whitney study, a prototype digital infrastructure on Ethereum, a public blockchain, to explore how it can support the issuance, transfer, and servicing of ownership of private digital assets. At the same time, DTCC also released Project Ion, an accelerated settlement project that further explored how the institution can shorten clearing and settlement cycles.

In November last year, DTCC moved a step further and launched a new platform called the ‘Digital Securities Management (DSM)’ platform to streamline the issuance, transfer and servicing of private market securities. The platform represented a major milestone in DTCC’s efforts to bring efficiency, standardization, and automation to the private markets, building upon its Project Whitney case study.

Using Cloud, API and DLT technology, the Digital Securities Management platform aims to provide the foundational infrastructure to enable the tokenization of securities and transform the private market ecosystem. 

Image source: Shutterstock

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Stablecoins Total Market Cap Breaches $179 Billion Mark – Can It Go Higher?

by NEWSBTC

Stablecoins, the digital currency that is the talk of the town, are gradually taking over the crypto world as more users and corporations vie for its benefits.

Such news doesn’t come as a surprise anymore. As the total value of the world’s 12,333 digital currencies approaches $1.8 trillion, the stablecoin economy has recently grown to $179 billion, or nearly 10% of the total crypto economy.

This record has been much quicker to attain compared to last year, where it took around two months to see the transfer volume surpass $150 billion. In 2020, it took nine months to surpass this milestone. As for 2019, it lasted an entire year.

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What Are Stablecoins?

The volatility of tokens has always been one of the major challenges to cryptocurrency investing. Bitcoin, for example, can drastically change in value by the minute.

Stablecoins are established to tackle that problem surrounding blockchains; it aims to keep track and match the value of the fiat currency US dollars (USD).

Tether (USDT), the first established stablecoin and still the most successful to this day, was merely introduced as a digital token with “a stable price.”

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This works as the Tether Foundation keeps 1 USD in reserve for every USDT issued, keeping its price stabilized around $1 since each unit of USDT could be redeemed for one of the US dollars in the reserve.

USDTUSD trading at 1.00080000 on the daily chart | Source: TradingView.com

Related Reading | On-Chain Data Shows Surge In Stablecoins Supply Pouring Into Bitcoin

Tether began with very little resources, having gotten little exposure from the public.

However, as Bitcoin’s price began to rise in 2017 and the risk brought by volatility became greater, Tether was also catapulted to the mainstream.

From its $1 million-mark in 2016, it surpassed a little less than $10 million in January 2017. By January 2018, as bitcoin’s price was skyrocketing to $20K, the Tether coin supply had ballooned to more than $1.4 billion.

Projected Growth

Many crypto enthusiasts and analysts point out that stablecoins are gaining momentum because their total supply is increasing marginally.

Most stablecoins are issued and backed by third parties, guaranteeing legitimacy on the side of customers. Some of the popular stablecoins along with Tether are Center’s USD Coin (USDC) and Binance’s BUSD, accounting for a little less than the entire supply of the digital token.

USDT is the leading stablecoin with a market cap of almost $78 billion, followed by USDC at almost $51 billion market cap.

It is because of stablecoins’ cryptographic security and programmability that the robust use cases currently driving the use of stablecoins are supported.

We can expect to see more innovation and growth in payment systems as a result of the use of stablecoins in the future.

Related Reading | Tethered Up: How Stablecoins Plan To Stay Stable

Image from CoinGeek, chart from TradingView.com

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Bank of America says stablecoin adoption and CBDC is ‘inevitable’

by Cointelegraph

It appears that the U.S. will finally be moving forward to create its own central bank digital currency (CBDC) according to the Bank of America.

Bank of America crypto strategists Andrew Moss and Alkesh Shah wrote in a Jan. 24 note that CBDCs “are an inevitable evolution of today’s electronic currencies,” according to a Bloomberg report. The analysts wrote:

“We expect stablecoin adoption and use for payments to increase significantly over the next several years as financial institutions explore digital asset custody and trading solutions and as payments companies incorporate blockchain technology into their platforms.”

Meanwhile, a Jan. 20 report titled “Money and Payments: The U.S. Dollar in the Age of Digital Transformation” from the Federal Reserve Bank (FRB) weighed up the benefits and disadvantages of the U.S. potentially adopting a CBDC.

It considered whether a CBDC could potentially “improve the safe and effective domestic payments system” for households and businesses as “the payments system continues to evolve,” possibly resulting in “faster payment options between countries.”

In the meantime, Shah and Moss stated that the use of digital currencies issued by private companies is likely to grow. Currently, the liability for existing forms of digital currency like online bank accounts or payment apps belongs to private entities, such as commercial banks.

However, a CBDC would be different in this respect because it would be the liability of a central bank such as the Federal Reserve, wrote the FRB in a statement about the report.

It also pointed out potential difficulties including preserving financial stability, protecting the privacy of users, and combatting illicit transactions. The Fed has opened to the floor for public comment on these issues until May 20.

Related: Solana could become the ‘Visa of crypto’: Bank of America

A CBDC is a digital version of a country’s fiat currency, such as the U.S. dollar. They started to step into the spotlight during 2020 when The Bahamas launched the world’s first CBDC, the “Sand Dollar.”

Meanwhile, China’s central bank is in the process of developing a digital yuan wallet, as it steps up its efforts to create a digital currency. In April 2021, Sweden’s central bank completed the first phase of its “e-krona” digital currency pilot.

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Bitcoin Should Not Be Measured In Dollar Terms, Says Pompliano

by NEWSBTC

The value of bitcoin is currently being measured in dollar terms and this is understandable given that fiat is still the most dominant form of currency. While those in the crypto space believe this will not continue for much longer, it is still important to price the digital asset in fiat currency to show its value to investors.

However, millionaire investor Anthony Pompliano has countered against this accepted form of valuing bitcoin. He addressed the way the digital asset is valued as well as the dreaded volatility on a recent episode of CNBC’s Squawk Box.

Don’t Value Bitcoin In Dollars

Presently, one bitcoin is trading for around $51K. This apparent value is derived from the dollar, which confers a fiat value upon an asset that was created to replace it. Pompliano says that this should not be so. Instead, bitcoin should be priced in bitcoin. This way, “one Bitcoin still equals one Bitcoin,” says the investor.

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Related Reading | Billionaire Ricardo Salinas: Forget Fiat, Buy Bitcoin Bitcoin Instead

Bitcoin’s value, when gauged in bitcoin, does not really change. The deflationary asset was designed in a way that it appreciates in value over time rather than depreciate, as is the case with the dollar.

However, Pompliano notes that people ignore or overlook this part because they are so used to using dollars in their everyday lives. Bitcoin was never really meant to be priced in dollars as the issues that already plague the fiat currency could then translate onto the asset, for example, its volatility.

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“The dollar itself is hyper volatile as well,” said Pompliano. “We just don’t think of that because all of the goods and services around us are priced in dollars.”

Bitcoin price chart from TradingView.com

BTC continues downtrend | BTCUSD on TradingView.com

Volatility Is Good When It Favors You

Speaking to host Joe Kernen, Pompliano revealed his thoughts around the volatility that is one of the hallmarks of bitcoin. Said volatility has been one of the most mentioned reasons when prominent figures and governments have advised investors to steer clear of the digital asset, explaining that they are prone to losses due to the widely fluctuating nature of the prices.

Related Reading | Why Bitcoin Will Never Surpass The Market Cap Of Gold

Pompliano however does not see bitcoin’s volatility to be a bad thing. He explained that volatility is mainly a matter of how it affects an investor. An example of this is when a digital asset’s price swings upwards and the investor realizes gains from this move. In this scenario, they would accept volatility as being a good thing. But if the opposite happens, then it would be regarded as a bad thing.

“Volatility is not good or bad, right? Basically, volatility is only bad when it goes against you, so if you long an asset and it goes down you don’t like volatility, if you long an asset and it goes up, you do like volatility.”

The millionaire also pointed out that another issue was that bitcoin’s volatility was also being mentioned in dollars. Given the latter’s also volatile and depreciating nature, Pompliano said that it was a flawed way of measuring volatility.

Featured image from CoinDesk, chart from TradingView.com

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Only 1% of Bitcoin Holders Controls 27% of Total Circulating Supply, Study Shows

by Blockchain News

A new study conducted by The National Bureau of Economic Research, an American private nonprofit research organization, has shown that only about 10,000 Bitcoin (BTC) holders own as much as 5 million of the total 18.9 million BTC in circulation nowadays.

This statistic is antagonistic to the claims that many Bitcoin proponents are preaching that the world’s first-ever cryptocurrency is a decentralized digital currency.

Decentralization is best showcased when numerous individuals have an almost equal stake in an asset such that one person cannot directly influence the market negatively. The decentralization features of Bitcoin and other digital currencies were the attractive factor that drew many into the developing crypto world. Many have come to trust that Central Banks can no longer directly influence the monetary system.

The image of Bitcoin appears to have been dented in this regard as the study, which finance professors conducted by Antoinette Schoar at the MIT Sloan School of Management and Igor Makarov at the London School of Economics, invalidates the core tenets that Bitcoin preaches.

“Despite having been around for 14 years and the hype it has ratcheted up, it’s still the case that it’s a very concentrated ecosystem.” 

As a way to bolster the argument that Bitcoin is not as decentralized as is being showcased, a comparison with America’s wealth distribution was brought to the fore. The study reveals that 1% of the wealthiest Americans controls just about a third of the total wealth in circulation today. 

Despite the soundness of the data presented, Bitcoin has no policy embargo preventing other investors from acquiring as much coin as they want. The supposed lack of decentralization in the Bitcoin ecosystem can be attributed to many factors, chief of which is the lack of regulatory clarity in key economies like the US. 

Should this regulatory push get better, more retail and institutional investors will be more willing to wade into the digital currency ecosystem with Bitcoin benefitting enormously.

Image source: Shutterstock

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Turkish Lira Vs BTC: What’s Behind The Bitcoin Chart You Can’t Miss

by NEWSBTC

Bitcoin price quoted in United States dollars has been suffering from a sharp and sudden downtrend after setting a new all-time high in November. But when quoted in Turkish lira, the top cryptocurrency kept on climbing in November and has never looked back.

The result? A shocking cryptocurrency price chart you simply have to see to believe. We’ll also explain the background behind the devastating downtrend in TRYUSD.

BTCTRY: Bitcoin Makes A Bullish Bet Against Struggling Currencies

All throughout the history of Bitcoin price action, after setting a higher high, the notoriously volatile cryptocurrency would blast off to a cycle climax. But the recent macro concerns around the Federal Reserve’s plans to raise rates put any bullish momentum on pause.

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Related Reading | This Bitcoin Morning Star Could Brighten The Bullish Narrative In A Flash

Instead of new highs in BTCUSD, the top crypto asset by market cap has fallen by 38% or around $20,000 per coin. However, crypto assets don’t only trade against the dollar, much like BTC can trade against altcoins like ETH.

Turkish lira BTCTRY_2021-12-17_13-29-14

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Bitcoin trading against the lira looks a lot different than the dollar | Source: BTCTRY on TradingView.com

Bitcoin can be quoted in the euro, yen, or in the case of the chart above, the Turkish lira. On the BTCTRY trading pair, after the all-time high was breached in early November, the bullish trend has yet to take a breather – let alone the steep correction seen in USD terms.

Behind The Turkish Lira Plunge, An Omen For The Dollar?

The flight to the dollar caused by the mere mention of rate hikes has decimated assets. In Turkey, the opposite is happening. Under president Recep Tayyip Erdoğan, Turkey’s central bank has cut interest rates by a full percentage point five times since September, sending the nation’s currency into a free fall.

Related Reading | Bitcoin Falls Flat: Examining A Rare Bull Market Corrective Pattern

During this time frame, the lira has fallen 50% against the dollar. Inflation in the country has also increased by 21%. Central banks in Turkey have attempted to intervene several times without success, selling off the country’s reserve of USD.

dollar lira tryusd

The lira has been in free fall against USD | Source: TRYUSD on TradingView.com

In response to inflation concerns, Erdoğan has raised the minimum wage by 50%, which Marek Drimal at Société Générale claims “will fuel inflation pressures further, together with the cumulative impact of the lira’s weakness”.

Additional, unspecified measures are also promised. But will they work? The lira is an example of what happens when there are no more levers left to pull. The United States Federal Reserve has a lot more shock and awe left in its war chest, but even it is struggling to balance markets, inflation, and a currency meltdown.

Follow @TonySpilotroBTC on Twitter or join the TonyTradesBTC Telegram for exclusive daily market insights and technical analysis education. Please note: Content is educational and should not be considered investment advice.

Featured image from iStockPhoto, Charts from TradingView.com

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