Facebook Planning to Develop a Stablecoin, Joseph Lubin Thinks the Worst is Over
The year is coming to a close and may close on a good note, at least according to Joseph Lubin as he thinks that the worst is over. Facebook has plans to develop a fiat-pegged stablecoin to be used for remittance purposes by WhatsApp users in India. The competition in the stablecoin market reaches a new level as USDC is listed by six more exchanges.
Facebook reportedly developing a stablecoin for remittance use in India
Facebook Inc., the largest social media company is reportedly diving into the cryptocurrency industry, reported the Bloomberg on Dec. 21.
According to people familiar with the matter who asked not to be named because it is an internal matter, the cryptocurrency will enable users to transfer money through WhatsApp messaging app. The social media giant is developing a stablecoin pegged to fiat currency to minimize volatility and will initially target the Indian remittance market.
It is still a long way before Facebook releases the stablecoin because it has to work on several strategies such as digital asset custody, the fiat currency that would back the stablecoin, etc.
This move potentially makes business sense for Facebook because WhatsApp has more than 200 million users in India. Facebook acquired WhatsApp for $19 billion in 2014. The Asian country is also a world leader in remittances after the World Bank claim that around $69 billion was sent to India in 2017.
Facebook reshuffled its management structure in May and Marcus was assigned to lead the company’s blockchain division. Marcus also resigned from his Coinbase role – sparking rumors that Facebook was potentially diving into cryptocurrencies. Marcus is the former president of PayPal and many thought that Facebook was going to make a big move in the financial services sector.
In a statement to Bloomberg, a company spokesperson said, “Like many other companies, Facebook is exploring ways to leverage the power of blockchain technology. This new small team is exploring many different applications. We don’t have anything further to share.”
This past year has seen tremendous growth in the number of stablecoin projects launching. According to Stable.Report, a platform that tracks stable coins, there are more than 120 such crypto projects. Tether is the leader in this segment and has suffered criticism for lack of transparency. Recently, Basis, a stablecoin project shut down and is expected to return the capital it raised to investors.
With 2.5 billion users, Facebook will become the first large technology company to venture into the stablecoin market.
While Facebook’s plans to launch a stablecoin are still a distance away, Tether has to fend off some real competition from USDC which has been listed on six more exchanges.
USDC listed on six more exchanges
Circle, a Goldman Sachs-backed startup announced on Twitter on Dec. 20 that its dollar-pegged stablecoin USDC has been listed on six more exchanges. The new exchanges to list the stablecoin are Alpha Wallet, ChangeNow, IDCM crypto exchange, Loopring, Salt Platform, and XinFin. This takes to more than 75 the total number of exchanges supporting USDC.
Circle has taken a different direction from Tether which lacks transparency to some extent. USDC hired Thornton LLP, one of the largest accounting firms based in the U.S. to carry out third-party audits.
USDC was recently listed on Binance, one of the world’s largest cryptocurrency exchange by trading volume and the listing worked in favor of the stablecoin. To date, Binance handles around 45 percent of the stablecoin’s daily trading volume.
Other exchanges that contribute to USDC’s trades are Poloniex, Latoken, and Coinbase Pro.
USDC was developed by Circle in partnership with Coinbase under the CENTRE Consortium. The stablecoin was developed on Ethereum’s ERC-20 protocol.
Coinbase launched a 12-day campaign to promote the stablecoin. It does so by bringing on board new features and services.
In recent times, mostly as a result of market volatility, many startups are developing stablecoins. The founders of Gemini exchange, the Winklevoss Twins launched the Gemini Dollar stablecoin in October.
If the stablecoins continue in popularity, maybe one day they can be used to facilitate everyday transactions.
Australia, crypto debit cards, 30,00 ATMs, and 1 million payment terminals
The adoption of cryptocurrencies as an everyday method of payment for goods and services has been hindered by delays and high transaction fees.
BTC.com.au, is a Sydney based startup that wants to change the status quo by offering a free debit crypto card which enables holders to spend their digital assets such as Bitcoin and Ethereum at any business or ATM.
The funds (in cryptocurrencies) loaded on the card are immediately available for use – sparing users from agonizing waits for the funds to clear. The startup charges a monthly maintenance fee of $4.99 but users can dodge the fee if they load their cards with $500 or more per month.
The startup charges an inactivity fee of $4 but this can be avoided as well if the users load their cards frequently. In short, frequent users of the card are incentivized. The debit card can be used at 30,000 ATMs and close to 1 million payment terminals in Australia only – for now.
Danny Ariti, the CEO of BTC.com.au says that his startup has created an easy platform for first crypto users to integrate cryptocurrencies in their everyday lives. He further added that the adoption of the crypto card has been great as it attracted people aged between 18 – 80.
The crypto card can be ordered online and users can receive their cards the following day. The card stores a maximum of $999.
Learn and earn with Coinbase
Blockchain technology and cryptocurrencies are complicated and many people have a hard time understanding them. Some have even thrown in the towel in understanding what Bitcoin is. There are a few things that are as hard as explaining blockchain or Bitcoin to a grandmother.
Coinbase, the largest cryptocurrency exchange in the U.S. announced a new feature on Dec. 19 called Coinbase Earn that allows users to earn while learning about cryptocurrencies.
Coinbase’s mission is to create an open financial system where everyone can participate. In order to do that, Coinbase needs to “make blockchain technology more accessible, both in the sense of making cryptocurrencies easier to obtain and easier to understand.”
The new system allows Coinbase users to earn Ox tokens by taking part in educational tasks such as watching videos and completing quizzes.
Coinbase expects a lot of people to show interest in the new system, and as such, the feature will be launched in invite-only mode. More educational content will be added to the system in the feature and users will be able to earn other cryptocurrencies.
The exchange says that people have traditionally obtained cryptocurrencies by buying or mining them. Coinbase notes that these two methods have barriers that prevent people from owning cryptocurrencies. The new system is a third option to acquire cryptocurrencies. People with smartphones or laptops now have the potential to earn digital assets.
“We think Coinbase Earn could help open up blockchain access to a new group of users: people who are curious about digital assets, but who’d like to try them out for free just like a normal web or mobile app. By serving that need, we hope to make blockchain more accessible in the process,” read the announcement made via a blog post.
Statis CEO: Create easy-to-explain coins and adoption will follow
Gregory Klumov, the CEO of Stasis, a tokenization platform says that the adoption of cryptocurrencies can happen if easy-to-understand cryptocurrencies are created and used.
“If you can’t explain what Bitcoin is to an average user who has no significant knowledge in finance or tech, how can you explain an algorithmic stable coin?” Asked Klumov.
The Basis stablecoin shutdown after it ran into difficulties with regulatory compliance requirements.
Speaking in November in Singapore, he said, “Stablecoins should be something really simple for an end user. A stablecoin should be something you can explain to your mother or your grandmother – how it works. Without that, you won’t be able to get widespread adoption. With algorithmic guys, they create fancy algorithms that might work for academics or finance people but they will not work for the general public.”
Joseph Lubin calls the crypto bottom of 2018
2018 is, without doubt, one the crypto market’s worst year ever. The prices kept going down and no one knows when things will turn for the better.
An unlikely source, Joseph Lubin, the co-creator of Ethereum and leader of ConsenSys breathed some hope to the crypto community when he called the bottom of 2018.
In his tweet on Dec. 21, he said, “I am calling the crypto bottom of 2018. This bottom is marked by an epic amount of fear, uncertainty, and doubt from our friends in the 4th and crypto-5th estates.”
His prediction is one of the most well-timed ones as the cryptocurrency market is on a recovery path. The price of Bitcoin surpassed $4,000 on Dec. 20 for the first time since Dec. 4. In the past few days, the price of Bitcoin has climbed from around $3,200 to its current price of just below $4,000.
The crypto market’s recovery has been put on hold after most of the top 100 digital assets are in the red. The top three assets – Bitcoin, Ether, and XRP are all down by between 2 to 4 percent while Bitcoin Cash is up 4.27 percent.
Tron, the tenth largest coin by market capitalization is 16.46 percent up. The entire market is worth $127.9 billion at the time of writing, down from $133.3 billion in the last 24 hours.
Lubin’s predictions are not just empty rhetoric but backed by solutions the industry needs. “The sky is not falling. From my perspective, the future looks bright. I remain excited about scalability solutions that are available now,” tweeted Lubin.
Donald Bullers, a North America Representative with Elastos is with Lubin on this one and believes that the worst is over.
“Cryptocurrency markets have steadily begun to recover this week, regaining off of a 35% rally by Bitcoin Cash (BCH). Those entwined in the industry are not surprised that markets are beginning to recover, and this move only further demonstrates the need for investors to ride out the storm, not abandon ship at the first sign of crashing,” said Bullers.
The U.S. Securities and Exchange Commission will examine the crypto industry in 2019
When the U.S. Securities and Exchange Commission (SEC) speaks, almost everyone in the crypto market listens.
On Dec. 20, the SEC released a compliance examination program for 2019 which highlights that the regulatory agency will closely study the crypto market. The SEC pointed out that the growth of the market ‘presents risks to retail investors.’
The increase in the number of market participants has prompted the SEC to “continue to monitor the offer and sale, trading, and management of digital assets, and where the products are securities, examine for regulatory compliance.”
With regards to anti-money laundering, the SEC said, “The Bank Secrecy Act requires broker-dealers to establish anti-money laundering (AML) programs. These programs must, among other things, include policies and procedures reasonably designed to identify customers, perform customer due diligence, monitor for suspicious activity, and where appropriate, file suspicious activity reports (SARs) with the Financial Crimes Enforcement Network. SARs are used to detect and combat terrorist financing, public corruption, market manipulation, and a variety of other fraudulent behavior.”
Two U.S. Congressman to amend the “Token Taxonomy Act”
The Congress may be ready to give the crypto industry regulatory clarity – something that will likely change the industry for the better.
Two Congressmen want to introduce a bill that excludes cryptocurrencies from the definition of a security. The legal definition of a security is very important as the current law is outdated for cryptocurrencies, reported CNBC on Dec. 20.
The lawmakers, Warren Davidson and Darren Soto argue that securities laws do not apply to cryptocurrencies if they have a fully functioning network.
In a statement, Davidson said, “In the early days of the internet, Congress passed legislation that provided certainty and resisted the temptation to over-regulate the market. Our intent is to achieve a similar win for America’s economy and for American leadership in this innovative space.”