Payment Expert’s Blockchain Bulletin analyses how the world of blockchain is constantly evolving and heavily impacting the payments industry, with cryptocurrencies, NFTs and the metaverse revolutionising the space.
This week, Ripple Labs announced it was joining the increasingly competitive stablecoin market in the US, whilst regulators in Congress hope to get legislation around the digital currency finalised before it becomes out of their control.
Stablecoin market heats up with Ripple’s arrival
Tether’s USDT, Circle’s USDC, PayPal’s PYUSD, and now Ripple Labs will join the competitive stablecoin market by launching a native US-pegged digital currency.
Markus Infanger, Senior Vice-President at Ripple, revealed that “stablecoins are playing an important role” and will continue to grow significantly as a cause for the cryptocurrency exchange to launch its own stablecoin.
With the current stablecoin market valued at roughly $150bn, and with the surge of interest in crypto investment stemming from the successful launch of the Bitcoin ETF last January, stablecoins have been viewed by many as a safe and secure venture into the crypto industry.
Infanger alluded to the friction that still exists between fiat and digital currencies and that stablecoins have the potential to be the bridge between the two for accelerated person-to-person payments.
Congress keen to pass stablecoin bill before the end of the year
With more and more high-profile players launching their own stablecoins, US regulators have been speaking on the need for quicker implementation over the markets regulatory oversight.
Patrick McHenry, Chair of the House Financial Services Committee, has revealed that he intends to get legislation passed before the end of his term on 3 January 2025, in which he will retire.
Passing a stablecoin bill has been much more complicated, however. Whilst a draft bill was passed to take it to Congress last July, talks have become a lot more stagnant, with opposition from both sides of the US political spectrum.
Maxine Waters, former Chair of the Committee raised concerns over the launch of PYUSD last year and believes that a proliferation of stablecoins could cause the country’s financial system to become unstable, as well as raising concerns over consumer protection.
Do Kwon charged by US, but remains in Montenegro
Disgraced TerraForm Labs Founder Do Kwon was charged for defrauding investors out of a total of over $40bn of its TerraLuna and TerraUSD tokens during the infamous collapse in May 2022.
After a nine day trial, a jury in the US District Court of the Southern District of New York found TerraForm Labs and Do Kwon defrauded customers and that Kwon “unlawfully offered and sold crypto assets securities in violation of the registration provisions of the Securities Act of 1933”.
Despite the US charges, Do Kwon still remains in Montenegro, where he was found at Podgorica airport and detained by authorities after being on the run from South Korea officials. The US and South Korea have both been lobbying to extradite Do Kwon to their respective countries.
Lisa Cameron MP: ‘UK should have leadership role’ to crypto regulation
During the Pay360 conference in London last March, Lisa Cameron MP, has called on the UK government to be a leader when it comes to crypto regulation.
The Chair of the All-Party Parliamentary Group (APPG) on Cryptocurrency and Digital Assets has acknowledged that whilst challenges still need to be overcome before a bill can become a realisation, she was encouraged by PM Rishi Sunak’s ambitions for the crypto sector in the UK.
She said: “We thought that it was very important that the UK have a leadership role. To summarise, the Prime Minister is someone who really gets digital technology. We want to see the cryptocurrency hub developing in the UK, a digital Britain more widely I would say.”
ECB explores DLT’s use for tokenised payments
The European Central Bank (ECB) has invited several companies to create use cases for the transaction process of central bank money on distributed ledger technology (DLT).
The ECB has invited 10 market participants, with six DLT-based operators and five central banks also involved in producing tests to settle wholesale transactions of central bank money in a bid to test the waters of the emerging technology’s capabilities when it comes to the speed of transactions.
Do the risks outweigh the benefits for CBDCs?
Speaking at the ‘Towards the future monetary system’ event in Zurich on Monday (8 April), Thomas Jordan believes that the “the risks of retail CBDC currently outweigh its potential benefits”.
The Chairman of the Governing Board at Swiss National Bank also gave his views on the new SIC payment system, the tokenisation of deposits and why the central bank still needs to be the ‘anchor’ for the payments landscape.
