News
Need to know what happened in crypto today? Here is the latest news on daily trends and events impacting Bitcoin price, blockchain, DeFi, NFTs, Web3 and crypto regulation.
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Stablecoin News
One of the hindrances to mainstream cryptocurrency adoption is price volatility, as these assets are freely traded in the open market without central administrators tasked with maintaining price stability. The anticipation of potential losses and gains has hindered cryptocurrency’s use as a medium of exchange. Stablecoins, however, are cryptocurrencies designed to maintain a stable value over time, making them ideal for commercial transactions.
The introduction of stablecoins in the cryptocurrency market ushered in a new wave of liquidity, as exchanges were able to provide trading pairs with tokens representing traditional fiat currencies.
Stablecoin design takes many different forms, each with its own tradeoffs:
- Reserve-backed stablecoins: Cryptocurrencies pegged to the value of a fiat currency held in reserve by a company or consortium. E.g., Tether (USDT), USD Coin (USDC) and Paxos Standard (PAX).
- Collateralized stablecoins: Tokens backed by other cryptocurrencies that retain a one-to-one value with a fiat currency through over-collateralization to absorb potential volatility of the underlying assets. E.g., Dai and BitUSD.
- Algorithmic (seigniorage supply) stablecoins: Rather than using a reserve or collateralization to maintain a stable value, these stablecoins are facilitated through an automated expansion and contraction of the monetary supply, emulating the role of central banks in the fiat economy. E.g., Basis.
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China’s cabinet will review a roadmap that includes yuan-pegged stablecoins to bolster yuan internationalization, sources told Reuters.
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Crypto advocacy groups accuse Wall Street bankers of trying to tilt stablecoin rules in their favor, warning Congress against changes to the GENIUS Act.
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The Banking Policy Institute wants lawmakers to further fine-tune the GENIUS Act to prevent any possibility of interest-bearing stablecoins.
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Wyoming announced the mainnet launch of the Frontier Stable Token stablecoin, becoming one of the first US states to issue a stablecoin.
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The appointment of Hines signals a renewed focus on entering US markets and more investments in “domestic infrastructure,” Tether CEO Paolo Ardoino said.
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Bitcoiner Chamath Palihapitiya filed documents to raise $250 million for American Exceptionalism, a prospective SPAC focused on the DeFi, AI, energy and defense sectors.
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The comments, due by Oct. 17, will focus on “innovative methods to detect illicit activity involving digital assets,” as required by the GENIUS Act.
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Circle’s new layer-1 blockchain will debut with Fireblocks support as the stablecoin sector expands, with Circle and Tether vying for market dominance.
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The FSC will introduce a bill that’s expected to provide guidelines on issuance, collateral management and internal control systems for stablecoins.
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A Hong Kong SFC official warned that the new local stablecoin framework has fueled fraud risks, and urged investors to remain cautious amid hype-driven speculation.
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Japan’s FSA is set to approve JPYC as the country’s first yen-pegged stablecoin, a move that could reshape demand for Japanese government bonds.
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The Treasury is considering embedding digital identity checks into DeFi smart contracts as part of its GENIUS Act consultation on crypto compliance tools.
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The current capital reserve requirements and rules make holding cryptocurrencies too costly for banks, limiting the sector’s growth.
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Bullish’s blockbuster IPO headlines a week of big crypto moves — from Pantera’s $300 million treasury bet to BitMine’s $24.5 billion Ether grab.
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