Libra Association Could Launch Various Fiat-Pegged Stablecoins, Says David Marcus

David Marcus, the co-creator of the Libra cryptocurrency project, has recently told a banking seminar the Libra Association could launch various fiat-pegged stablecoins instead of its proposed cryptocurrency.

According to Reuters, Marcus notes that “instead of having a synthetic unit” the Libra Association could launch “a series of stablecoins, a dollar stablecoin, a euro stablecoin, a sterling pound stable coin, etc.”

As covered, Facebook revealed last month that the basket of currencies backing its Libra would be composed by the U.S. dollar (50%), the euro (18%), the Japanese yen (14%), the British pound (11%) and the Singaporean dollar (7%). Its USD backing would also consist of short-term U.S. Treasury bonds.

During the banking seminar David Marcus stressed that the Libra Association’s preferred option weren’t fiat-pegged stablecoins, although its goal remains the same: to create a more efficient payments system.

Marcus added the Association is looking to launch its product in June of 2020, noting:

That’s still the goal. We’ve always said that we wouldn’t go forward unless we have addressed all legitimate concerns and get proper regulatory approval. So it’s not entirely up to up to us.

Late last month Facebook’s CEO Mark Zuckerberg dodged a question regarding the 2020 deadline, and instead noted the company is “really focused” on ensuring the Libra Association’s product launches well.

Several of the Association’s founding members, including PayPal, eBay, MasterCard, and Visa, have left it as it struggles with regulatory scrutiny and potential risks associated with money laundering and terrorism financing.

Despite the scrutiny French billionaire Xavier Niel, founder of the Iliad telecoms group, has publicly stated the project is “inevitable” and “constructive,” arguing regulators should embrace the new cryptocurrency as “fearing it will not prevent it from happening.”

Featured image by Steve Johnson on Unsplash.

Most of Tether is Used on Centralized Exchanges for Arbitrage, Report

  • A new report by blockchain analytics firm Flipside Crypto claims the majority of Tether is used for arbitrage on centralized exchanges.
  • Flipside found that all Tether is filtered through Bitfinex before reaching the market and that no USDT has ever been destroyed. 

A new report by blockchain analytics firm Flipside Crypto claims that most of Tether’s use occurs on centralized exchanges for arbitrage. 

In a post published May 28, Flipside Crypto analyzed Tether’s on-chain activity to find that the majority of USDT is used for exchange-based arbitrage. Flipside compiled a visual chart of Tether’s on-chain activity, showing that all newly minted USDT is filtered through the cryptocurrency exchange Bitfinex before being released to the market. 

The report pointed out the overlap in parent companies between Tether and Bitfinex, which became a primary point of interest for the NY Attorney General’s Office in April 2019. Bitfinex was accused of using $850 million in funds from Tether to cover losses incurred by the sudden seizure of its now-defunct payment processor Crypto Capital.

The report continued, revealing that no USDT had ever been “burned” or removed from the total market supply.

Instead, Flipside argued that Tether’s primary use has been for arbitrage on centralized cryptocurrency exchanges. 

According to the report, 

It’s pretty clear that most of Tether is used on centralized exchanges, namely Huobi (in light grey), Binance (in yellow) and Bitfinex (in green). The constant movement back and forth between users (in red) and these exchanges reflects the fact that Tether is mostly used for arbitrage. Users can easily make a profit by buying from one exchange and selling on another for a higher price.

Flipside continued, explaining that traders are paying higher fees on Tether transactions to send USDT directly between personal wallets, as opposed to processing through exchanges, in order to create faster and more efficient arbitrage. 

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