Circle, the issuer of the second-largest stablecoin USDC by market capitalization, announced last Friday that it keeps about $3.3 billion in cash reserves at Silicon Valley Bank. Amid the news, the asset temporarily lost its peg to the U.S. dollar and fell to $0.87.
The intervention of the U.S. and UK regulators contributed to the rapid recovery of USD Coins. Despite this, the confidence of the cryptocommunity in the company was noticeably shaken, and many investors rushed to transfer funds from USDC to other stablecoins. Circle’s four competitors were luckier than the rest: let us tell you who made the list.
Tether is the most controversial company on our list. Back in 2021, Alex Mashinsky, CEO of bankrupt cryptocurrency lender Celsius, told the Financial Times that Tether mines USDT against bitcoin and Ethereum for some big clients. Such actions directly contradict the company’s own terms and conditions.
According to the last published audit report, dated December 2022, 82% of the company’s reserves are held in “cash and cash equivalents, other short-term deposits and commercial paper,” which primarily consist of U.S. Treasury bills (58.5% of all reserves). Cash and bank deposits account for 8% of the total, with the remainder distributed among funds, reverse repurchase agreements, U.S. non-treasury bills, and other assets.
Before the USDC incident, USDT had a market capitalization of $71.9 billion, which had risen to $75 billion by Monday evening, representing an overall increase of 1.5% over the period under review.
DAI is an algorithmic stablecoin issued by one of the pioneers of decentralized finance (DeFi) MakerDAO. It is backed by cryptocurrency – mostly USDC, although some Ethereum-based tokens can be used to mine new coins.
An algorithmic stablecoin is a digital asset whose exchange rate is tied to a specific currency, a basket of currencies, a cryptocurrency, a basket of cryptocurrencies or other assets. For example, if a coin is pegged to the U.S. dollar at a 1:1 ratio, its exchange rate should always be near the $1 mark. An algorithm is responsible for stabilizing algorithmic stablecoins. It keeps the exchange rate of tokens close to a predetermined level.
Last Friday DAI had a market capitalization of $4.9 billion. By Monday morning it had risen 28.6% to $6.3 billion.
True USD (TUSD) – the most reliable stablecoin
TrueUSD is a centralized regulated stablecoin from TrustToken. Introduced in 2018, 1:1 U.S. dollars fully backs TUSD, confirming Chainlink’s reserve proof.
TrustToken holds fiat reserves in third-party bank accounts owned by trust companies that have signed an agreement to publish monthly audits. This reduces counterparty risk, protects token holders, and makes sure that the TrustToken platform itself has no direct access to funds.
After the SEC opened an investigation into BUSD issuer Paxos, Binance focused on TUSD and smuggled more than 180 million tokens. This explains the rapid growth in its capitalization by 114.5% in the last thirty days.
Last Friday, TUSD had a total value of about $1.3 billion. Over the weekend, it rose 53.8% to over $2 billion.
Liquity USD (LUSD)
LUSD is a native token of the Liquity DeFi lending protocol. Users obtain loans in LUSD using Ethereum as collateral. For every $1.10 ETH blocked in a Liquity smart contract, there is $1 LUSD. This makes the pledge ratio more favorable to borrowers than MakerDAO.
LISD had a market capitalization of about $230 million before USDC decoupled, up 10.4% over the weekend.
We previously reported that Goldman Sachs will increase transaction speeds fivefold thanks to blockchain.
BTC price holds 6% gains as Bitcoin battles for ‘crucial’ $28K support
Bitcoin (BTC) passing $28,000 hints at bullish sentiment, but reclaiming it for good is essential, analysis says.
In an X (formerly Twitter) post on Oct. 17, Yann Allemann and Jan Happel, co-founders of on-chain analytics firm Glassnode, described the $28,000 mark as a “critical milestone” for the BTC price.
Glassnode: “Keep an eye out” for $28,000
After snap volatility, which caused Bitcoin to hit $30,000 for the first time since August, the largest cryptocurrency has managed to preserve some of its gains.
For Allemann and Happel, the pair is now at a defining crossroads.
“The crypto market is hinged on BTC’s ability to breach and consistently maintain a value north of $28k,” part of their commentary stated.
$28,000 has formed a battleground ever since Bitcoin first crossed it in early 2021, and liquidity has traditionally surrounded it as bulls and bears fight to secure control over long-term trajectory.
Data from the trading suite DecenTrader, among others, confirms that the status quo remains despite recent BTC price moves, with $28,000 lying in a zone between major longs and shorts of varying leverage.
“While this pivotal milestone was momentarily attained on futures, the spot market price peaked at $27.98k earlier today. It’s evident just how crucial this price point is in the larger scheme,” Allemann and Happel added.
“The rapid movements and these price thresholds aren’t just numbers. They signify investor sentiment, market dynamics. Keep an eye out for the 28k level.”
Road to Bitcoin halving contested
As Cointelegraph reported, predictions over what the future will bring for Bitcoin both before and after its next block subsidy halving in April 2024 differ considerably.
In an interview last month, DecenTrader co-founder Filbfilb eyed BTC price galvanizing itself for upside during Q4, possibly reaching $46,000 by the halving.
Some well-known market participants, however, remain risk-averse. Among them, popular trader Crypto Tony and others are betting on a pre-halving return to $20,000 for a final local bottom.
“Many can scream they are long right now and caught that move, but if your not taking profit here at resistance your doing something wrong,” he told X subscribers about the recent surge.
“I personally will not be long unless we flip that $28,500 level into support.”
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
Ripple job posting hints at possible IPO, XRP community says
Fintech payments company Ripple released a new job posting on Oct. 16 for a shareholder communications senior manager across multiple locations in and outside the United States. The job posting prompted many crypto enthusiasts to label it as an official hint about the company’s plans to go public.
The job posting outlines that the role will require direct communication with shareholders — a concept generally associated with publicly traded companies. The chosen candidate would be responsible for developing and implementing communication and relationship management strategies for “existing and prospective investors, current shareholders, and financial analysts.”
The job description emphasizes the candidate’s need to create strategic plans specifically suited for situations like “M&A [mergers and acquisitions], investments, liquidity events, and other high-impact moments.“
The role includes creating investor-focused materials like “presentations, fact sheets, case studies, and analyses“ to inform and educate potential investors about the company’s prospects and performance — a necessary component of the initial public offering (IPO) preparation process. The responsibilities of the post also include maintaining a shareholder database and managing routine communications like quarterly updates.
Many XRP (XRP) proponents and the pro-Ripple community on X (formerly Twitter) are referring to the job posting as a hint that there may be an IPO. Some key executives from the company have also alluded to the possibility that Ripple might go public but haven’t given any indication of timing.
Anyone notice the recent job openings at #Ripple?
The only reason you need a Shareholders Communication Manager.. is for an IPO.
— Chad Steingraber (@ChadSteingraber) October 16, 2023
The crypto-focused payments company has recently been in the limelight due to the U.S. Securities and Exchange Commission’s (SEC) lawsuit alleging XRP is a security. Ripple scored a major win in the lawsuit in July when a judge ruled that XRP is not a security in terms of sale on digital asset exchanges.
Key Ripple executives have claimed that even though the SEC lawsuit has cost them many business opportunities in the U.S., most of its remittance business lies outside America.
Banks’ crypto exposure must be disclosed — BIS’ Basel Committee
The Basel Committee on Banking Supervision of the Bank for International Settlements (BIS) released a consultation paper on Oct. 17, proposing to make it compulsory for banks to disclose their crypto exposure.
The Basel Committee comprises central banks and financial authorities from 28 jurisdictions and is a forum for regulatory cooperation on banking supervisory matters. The latest consultation paper is based on the disclosure guidelines in the final prudential standard on how banks should handle their exposure to crypto assets released in December 2022.
The consultation paper aims to set a standardized “disclosure table and set of templates for banks’ crypto-asset exposures,” with a proposed implementation date of Jan. 1, 2025. The Basel Committee has opened the proposal for public comment until Jan. 31, 2024, after which the results will be published on its website.
Under the new proposed regulations, banks would be required to provide quantitative data on exposures to crypto assets and the corresponding capital and liquidity requirements. Banks would also be required to offer qualitative data on their activities linked to cryptocurrencies.
Additionally, banks would be required to offer information on the accounting classifications of their exposure to crypto assets and liabilities. In its proposal, the committee claimed that using a uniform disclosure format will encourage the application of market discipline and lessen information asymmetry between banks and market participants.
The committee also reviewed crypto assets and bank exposure in June. At the time, the committee didn’t delve deeply into the topic, mentioning only that it was focusing on permissionless blockchains and the eligibility criteria for “Group 1” stablecoins.
The BIS has been actively involved in crypto consultations and examining the regulatory aspect of decentralized technology. Recently, the BIS and a handful of European central banks published details of a concept to develop a system to track international flows of cryptocurrencies.
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