Most existing issuers do not have robust mechanisms to support the pricing of digital assets. The Financial Stability Board warned of this in a report. This creates risks for stablecoins.
The paper notes that some issuers offer redemption of stablecoins only once a week, leaving ample opportunity for delayed redemption, or refusing redemption altogether. These are issues with stablecoins. The international organization also notes that issuers deliberately set high minimum thresholds to prevent holders of stablecoins from converting assets into fiat.
“The result of these restrictions is that most users must sell their stablecoins on exchanges at prevailing market prices, where the redemption price is not guaranteed,” the organization said.
At the same time, the organization is exploring opportunities for stablecoins to improve the current system of cross-border transfers. Right now, the financial system suffers from long chains of financial transactions and outdated technology platforms. The results of the study of stablecoins for international transfers are expected to be known by the end of 2022.
In October 2021, Fitch Ratings analysts said that stablecoins threaten the stability of the short-term securities market. As an example, the experts then referred to Tether, a stablecoin USDT issuer, which at the time held almost half (49%) of its reserves in certificates of deposit and commercial paper.
In May 2022, the U.S. called for taking cryptocurrencies “under the radar” because of their rapid development. In a media interview, U.S. Senate Banking Committee member Pat Toomey acknowledged that proposals to subject stablecoin issuers to banking requirements may be excessive. However, he still believes that the stablecoins industry, with a capitalization of several hundred billion dollars, should have its own regulatory framework.
We previously reported on why the link between bitcoin’s energy consumption and hash rates broke down.
Apple forced Coinbase to remove NFT transfers
Apple NFT news: Coinbase said Apple is demanding a 30% tax on the gas fee used for NFT transfers. NFT coinbase wallet users can no longer send NFTs due to Apple’s interference.
Coinbase said it could not meet the requirement even if it tried because the iPhone maker’s own in-app purchasing system does not support cryptocurrency. Note that the current stock price of Apple was not affected by the situation.
Users affected by this decision, i.e. iPhone owners, will find it “much harder to transfer this NFT to other wallets. Coinbase added that the blockage may have been an oversight, and urged Apple to contact the company with any questions.
Coinbase first announced the NFT coinbase wallet in December 2021, giving users access through the app to trading platforms such as OpenSea. The NFT token issuance and trading platform was conceived as a peer-to-peer marketplace equipped with social platform functionality. This feature should help community members find new NFT tokens and collections.
In November, Apple updated the App Store’s NFT rules, so developers can now sell tokens they have placed on the App Store. However, the new rules prohibit using cryptocurrencies, cryptocurrencies, and QR codes to unlock features in the app. Also, development companies must have a license to operate in the country where the app is sold.
Earlier, we reported that crypto investors intended to achieve the arrest of FTX through protests.
Tether says its USDT loans are “over-secured”
Tether, the issuer of the USDT stablecoin, claimed that the USDT loans it issues are characterized by overcollateralization. This was the project’s response to a recent Wall Street Journal study. In it, WSJ analysts expressed fears that Tether’s current lending practices could trigger a new crisis in the crypto industry.
According to WSJ, Tether lends its own USDT Coins to customers without exchanging them for hard currency. As a consequence, in the event of a crisis, the company may not have enough long-term liquid assets to repay the money you borrow USDT and redeem these coins. So it makes sense to apply for USDT loans to companies that offer the opportunity to pledge various stocks of large companies. For example, at the current stock price of Amazon or another corporation.
Such fears are understandable amid a steady stream of news about the collapse of the FTX crypto exchange and its implications for the crypto market. In particular, the ensuing market collapse may have also contributed to the “erosion” of Tether’s collateral.
In response to these accusations, the project published a post on Twitter with the eloquent title “The hypocrisy of the mainstream media falling asleep at the information wheel.”
The project’s management believes that the WSJ analysts are completely mistaking the USDT kinoin itself for the collateral backing it. Meanwhile, “Tether’s secured loans are characterized by over-collateralization and are even backed by additional equity if necessary.”
According to the company, 82.45% of its reserves are currently held in U.S. Treasuries and other cash equivalents. Meanwhile, the decline in the USDT token is irrelevant to the value of loan collateral. Such fluctuations in quotations are only relevant to the exchange value of the coin itself.
Recall that the project boasts the longest list of accusations against it about insufficient collateralization of its stablecoins and/or lack of transparency of information on this topic.
We previously reported that hackers have stolen $3.37 billion worth of cryptocurrencies since the beginning of the year.
The market of a metaverse company has reached almost 150 virtual worlds
The virtual reality industry has grown to nearly 150 digital worlds in the fourth quarter of 2022, researchers found. The volume of a metaverse company at the end of IV quarter of 2022 was 148 pieces. This was reported by analysts from the consulting firm Metaversed. However, so far, the current stock prices of Meta do not react.
According to the researchers’ calculations, most of the users remain on the projects of Web2. For example, the largest virtual world is fixed in the game-meta universe Roblox, which accounts for about 202 million monthly active players. The price of cryptocurrency for metaverse against this background is growing.
The video game Minecraft is in second place with 174 million active players. Fortnite, with 81 million players, was the third one. Projects with a focus on the Web3 model have a much smaller user audience, but the number of these worlds is much higher than the video games of the Web2 model.
For example, the blockchain game Axie Infinity attracts only 700,000 players per month. In second place is Upland with 600,000 users, and NFTWorlds, a virtual world with 500,000 users, takes third place.
Game metaverse is not a toy
The game industry, for the most part, is skeptical of metaverses and does not see them as different from traditional video games. As BeInCrypto editorial staff wrote earlier, Xbox CEO Phil Spencer thinks that the current implementations of meta-villages are more like “a cheaply made video game”.
Herman Narula, CEO of Improbable, the developer of the metaverse, partially agreed with Spencer. He acknowledged that video games are already inherently mini-metagons. However, according to Narula, meta-villages posit the idea of combining experiences. That said, he agrees that metaverses are many times more attractive to sports leagues and fashion brands than they are to video game developers.
We previously reported that the largest bitcoin miners owned banks $4 billion.
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