U.S. Stablecoin Regulation Coming, Is This a Good Thing or Bad?
Leaders of the House Financial Services Committee is drafting a new bipartisan bill to address stablecoins, laying out stringent requirements for the types of assets that can back stablecoins. It would also impose prudential standards on stablecoin issuers and prohibit commercial companies, namely Meta formerly known as Facebook, from becoming issuers themselves.
This is a significant event as it would forever change the landscape of cryptocurrency, challenging the values of crypto being decentralized and free of governmental jurisdiction. But full autonomy could also bring about irreparable damage to the market. The sudden vaporization of $18 billion in the collapse of algorithmic stablecoin terraUSD (UST) has triggered a deadly domino effect. As a result, several crypto giants went bankrupt such as Three Arrows Capital, Celsius Network and Voyager Digital, just to name a few. So the important question is, “Will government involvement in the cryptocurrency market bring stability or will it negatively impact the freedom of retail investors?”
Tesla Dumps 75% of its Bitcoin Holdings! Dogefather Elon Musk Paper Hands?
Tesla just sold 75% of its Bitcoin holdings worth $936 million. This unprecedented move has shaken the community as Tesla CEO Elon Musk is widely regarded as a de facto crypto leader and a proponent of Dogecoin in the cryptocurrency market. During an investor call, Musk addressed the major dump, saying that it was “concerned about overall liquidity of the company given COVID shutdowns in China.”
Given the situation of numerous crypto giants going insolvent due to unforeseen liquidity crisis, it might not be a surprise Tesla is next. Even though Tesla is not exactly a crypto firm, the circumstances are the same, not to mention Tesla is facing billions of dollars in losses from its new plants, supply chain interruptions and COVID lockdowns, which is enough for Musk to bring up the possibility of bankruptcy last month.
U.K. Stablecoin Legislation Unveiled, Beginning of Crypto Adoption?
The U.K. Treasury has revealed its proposed digital asset legislation to Parliament for the use of stablecoins as a means of payment. Following the collapse of $18 billion algorithmic stablecoin terraUSD (UST), the Bank of England published a consultation on its plans to regulate crypto assets, stating the bank be given the power to appoint administrators to oversee insolvency procedures for failed stablecoin issuers.
This legislation is not exactly the same as the U.S. bipartisan bill. Instead, it is aimed at strengthening the U.K. financial system post-Brexit rather than restricting stablecoin issuers. Former Minister of State at the U.K. Treasury John Glen said that bringing stablecoins under the payments system will “enable consumers to use stablecoin payment services with confidence.” This means that we will be seeing the U.K. taking initiatives in becoming a global crypto hub, perhaps one step closer to worldwide crypto adoption?
FTX Seeks to Raise Funds after Rescuing Struggling Firms, Sam Bankman-Fried is Crypto’s Knight in Shining Armor?
FTX and FTX.US led by founder Sam Bankman-Fried are looking to raise $800 million in total at $40 billion valuation following an acquisition campaign in which Bankman-Fried went on a company buying spree as well as lent millions to troubled crypto firms. This power move by the young billionaire demonstrates his dominance of digital assets, doing everything he can to help other firms fight the volatility of the market. Bankman-Fried said that he accepts “moderately bad deals” to help revive the crypto sector. This type of leadership and initiative are important qualities to look out for in key crypto leaders, especially during crypto winters. As a result, Bankman-Fried and his empire might just come out on top at the end of this bear market.