Online Tech Giants Push Stablecoin Adoption

Posted on 05/13/2021

Jon Cunliffe is the Deputy Governor of the Bank of England. “First and foremost are the financial stability implications of the absence of public money for use by the general public,” Cunliffe said in speech on Thursday. “Ensuring confidence in money as a means of payment and store of value is fundamental to financial stability.”

As online commerce increases usage, stablecoins and other digital currencies could quickly gain support among consumers. Stablecoins are cryptocurrencies that attempt to peg their market value to some external reference. The Bank of England is looking at the potential of creating a central bank digital currency. China and Sweden have explored digital central bank currencies. If approved, the digital currency would exist alongside cash and bank deposits, rather than replacing them.

“Future private money and payments providers may not have the commercial incentives to provide usable services for the un-banked and other parts of the population,” Cunliffe said. “Digital public money, appropriately designed, may therefore have an important role to play in ensuring inclusion.”

Libra Pushed Over for Diem

The Diem Association, which has ties to Facebook’s stablecoin dreams, is partnering with Silvergate Capital Corporation (Silvergate Bank) to launch a U.S. dollar-pegged stablecoin. Diem Networks US, a subsidiary of the association, will run the Diem Payments Network and register as a money services business with the Financial Crimes Enforcement Network (FinCEN). Silvergate will be the formal issuer of the Diem USD stablecoin. Silvergate will also manage the reserve backing the token. Diem, formerly known as Libra, will also move its operations out of Switzerland and back to the U.S. and withdraw its application for a Swiss Financial Markets Authority license. Libra was Facebook’s original project to make a Swiss-based global digital currency.

“We are committed to a payment system that is safe for consumers and businesses, makes payments faster and cheaper, and takes advantage of blockchain technology to bring the benefits of the financial system to more people around the world. We look forward to working with Silvergate to realize this shared vision,” Stuart Levey, chief executive officer of Diem, said in a statement. Trust Company, Inc. (GMO Trust), the New York-based, regulated stablecoin subsidiary of Japanese Financial Services and Internet conglomerate GMO Internet Group, and Binance, the global blockchain company behind the world’s largest cryptocurrency exchange by trading volume and users, announced its partnership to bring “GYEN”, the world’s first regulated Japanese yen (JPY) stablecoin, to Binance’s exchange. GYEN can be purchased and redeemed directly 1:1 from GMO Trust in fiat, and can be traded against popular cryptocurrencies on Binance, including BTC and USDT. GYEN is fully regulated by the New York Department of Financial Services (NYDFS).

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