TokenReporter: What's a stablecoin?
|John Biggs||Feb 28, 2019|
Hands on with the first bitcoin phone
We just posted a great video with the CEO of Pundi whose latest device, the “bitcoin phone” is an interesting effort at making real blockchain hardware. Check it out here.
What’s a Stablecoin?
Financial literacy is a hell of a thing. It isn’t really taught in schools, other than the odd project some teachers do on stock trades. No one really teaches personal finance practices, or teaches how banks work, beyond a week or so in social studies watching some scratched old filmstrip about how a credit union differs from a bank.
On top of that, there are whole other vagaries of the way things have been done that are clear as mud to most folks. Settlement? SWIFT? And most of these systems have grown up organically, as solutions to specific problems, tangled spiderwebs layered as badly as the power grid (which is its own unplanned nightmare.)
So as crypto and blockchains come into being, they’re at a unique opportunity to replace the old cruft with new systems that are potentially more sanely designed. At the same time, there’s a lot of people who plan nothing more than replacing the old way with a new way that slots right in.
We see it with the notion of “stablecoins”. A stablecoin is a currency pegged to another stable asset, like the US dollar. The idea is, by making the coin pegged to something non-volatile, the currency gains stability, and reduces financial risk. As you might expect, this causes a lot of frustration among people who worry about whether or not things are decentralized enough. A stablecoin based on a government-issued currency is centralized. A stablecoin based on another cryptocurrency would probably be decentralized, presuming that other currency was sufficiently decentralized.
All of this is relevant because the bank JP Morgan, whose head Jamie Dimon previously spoke regularly about how bad bitcoin is, had announced their own stablecoin recently. Historically, it makes sense that they might, they had published internal reports on long-term strategy for cryptocurrencies. Much of the document is educational, showing how the bank thinks about things like anonymity, or the utility of cryptocurrencies for policy credibility or providing liquidity in crises. (Imagine our surprise, they weren’t fans.)
JP Morgan’s stablecoin appears to be positioned to increase settlement efficiency for cross-border transactions, securities transactions, and could be used by large international corporations to replace the funds businesses hold around the world in subsidiaries. What remains to be seen is whether or not it actually gets used for any of these functions.
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Facebook wants a cryptocurrency
Facebook is “hoping to succeed where Bitcoin failed” is the line quoted in a report by the NYT. The idea is, with Facebook merging WhatsApp, FB and instagram, they could use their own coin as a payment system across all three platforms. It’s said to be a stablecoin tied to three different nation’s currencies. They aren’t the only messaging platform working on such a thing, Telegram had their ICO rounds and is working on TON, the Telegram Open Network blockchain.
Moscow to use Blockchain-based voting
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Only 2 businesses in Ohio have used crypto to pay taxes
When we last talked about this, Ohio allowed taxpayers to pay through ohiocrypto.com , but only businesses are allowed to pay this way, not individuals. Robert Sprague answered questions about how it was working at a forum held by the Ohio State Associated Press, and said that only two tax payments have been received through the platform. He also stated that “We’re reviewing how [the program] might be either curtailed or might be expanded, and what our counter-party risk is with that vendor.”