Here is our pick of the 3 most important stablecoin stories during the week.
China’s CBDC slows, Tether gets T Bills and the USA has an ugly baby!
This week we got an update from China on their CBDC, whose uptake has slowed to a crawl, whilst Tether in response to criticism has now put all of its reserves in US Treasury T Bills and the US Federal Government is wrestling with the difficult birth of its stablecoin legislation.
First an update from China’s central bank digital currency (CBDC) which has reached the milestone of 100 billion yuan (US$13.9 billion) worth of transactions amid a slowdown in uptake, South China Morning Post (SCMP) reported Thursday, citing People’s Bank of China (PBOC) data.
This year, transaction volume in China’s e-CNY has increased by 14% from the 87.6 billion yuan ($12 billion) recorded at the end of 2021, which is a big decrease when compared to the 154% growth seen between June and December of last year.
China’s CBDC Transactions Reach $14B as Uptake Slows: Report (coindesk.com)
Tether reports it has eliminated commercial paper from its stablecoin reserves, ending a years-long relationship with the investment vehicle that had partially backed its crypto.
The issuer said Thursday it has replaced the paper with US Treasury Bills — short-term government-issued debt securities — as part of ongoing efforts to increase transparency.
Tether Says USDT Stablecoin Now Backed by T-Bills – Blockworks
Patrick McHenry, ranking member of the United States House of Representatives Financial Services Committee, thinks the “conversation has become unmoored” regarding financial technology and needs to return to solving real-world problems. He is currently in talks over legislation that may at least bring more clarity to stablecoins.
Currently, there is no U.S. federal definition of digital assets or stablecoins, McHenry said, calling the situation “retrograde.” McHenry, House Financial Services Committee Chair Maxine Waters and the Treasury Department have been in negotiations for months on legislation to regulate stablecoins
Rep. McHenry gives progress report on stablecoin legislation, says it’s an ‘ugly baby’ (cointelegraph.com)
So in summary, uptake of China’s CBDC has slowed to a crawl, Tether has loaded up on US Government debt (or Treasury Bills) for transparency on its stablecoin backing while the US Federal legislation on stablecoins is an ugly baby.
Just another crazy week in stablecoin world!
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Alan Scott is an expert in the FX market and has been working in the domain of stablecoins for many years.
Twitter @Alan_SmartMoney
We have a self imposed constraint of 3 news stories per week because we serve busy senior Fintech leaders who just want succinct and important information.
For context on stablecoins please read this introductory interview with Alan “How stablecoins will change our world” and read articles tagged stablecoin in our archives.
