This is the latest issue of Finance Redefined, Cointelegraph's DeFi-centric newsletter delivered to subscribers every Wednesday. A relatively quiet week in DeFi finally has given me some breathing room to talk about a subject I’ve been postponing since almost the beginning of this newsletter, namely: What’s up with decentralized finance’s weird obsession with algorithmic stablecoins? There are so many of them, and so many new projects get an unreasonable amount of attention. The latest is Basis Cash, which turned the heads of quite a few farmers this week. This week also saw the full launch of Neutrino’s NSBT governance token, …

Germany’s Bankhaus von der Heydt, or BVDH, has launched a Euro stablecoin on the Stellar network. The bank claims the token is the first of its kind to be issued by a banking institute.The EURB stablecoin, which went live today, was developed on the Stellar blockchain in partnership with tokenization and digital asset custody technology provider Bitbond. The asset, which is fully regulated and backed one-for-one with Euros, will not be openly traded on exchanges due to tight regulatory and Know Your Customer requirements. If a customer wants to acquire the stablecoin, a fiat currency transfer is held in an …

Stablecoin creator and crypto services provider Paxos filed an application to open a national bank on Wednesday. If approved, the pioneering Paxos General Trust will be headquartered in New York, licensed to hold cryptocurrencies and execute the duties of a regular trust bank. According to a blog post on the Paxos website, being granted a national trust bank charter from the U.S. government would broaden both the range of services offered by the company and the geographic area to which it can offer services: “Our mission is to modernize financial market infrastructure and enable the movement of any asset, any …

Contrary to public perception, JPMorgan Chase has always been pro-blockchain, says the multinational investment bank's head of wholesale payments, Takis Georgakopoulos. In a live discussion with Nasdaq reporter Jill Malandrino at this year’s Blockshow in Singapore, Georgakopoulos said JPMorgan has always viewed the blockchain and crypto industry through three lenses: Bitcoin (BTC) and other non-fiat-based cryptocurrencies; fiat-based digital assets created by institutions and central banks; and blockchain technology. When questioned about whether JPMorgan is “softening its stance” on digital assets, Georgakopoulos clarified the bank had only softened its stance on Bitcoin, as it had only ever had reservations about non-fiat …

The public and private sectors should work closely together to bring about the future of money, according to a former leader of the Commodity Futures Trading Commission. Chris Giancarlo, a former CFTC chairman and initiator of a blockchain-based digital dollar project, joined the Singapore Fintech Festival 2020 to discuss the future of stablecoins and central bank digital currencies, or CBDCs. At a Tuesday panel called “Will CBDCs disrupt stablecoins?,” Giancarlo declared that the future of money depends on close government collaboration with the private sector. Addressing Iliana Oris Valiente’s question on the potential coexistence of the emerging rise of CBDCs …

The Neutrino Protocol, a project building algorithmic cross-platform stablecoins, announced Tuesday the launch of staking rewards for its governance and utility token, the Neutrino System Base Token (NSBT). Neutrino uses an innovative mix of collateral backing and algorithmic supply changes to create a wide range of fiat-pegged stablecoins. Its flagship stablecoin, USDN, and NSBT are available on Ethereum as ERC-20 tokens. The USDN generation mechanism relies on WAVES, the native token of the Waves platform. Generating the stablecoin is as simple as using its smart contract to exchange WAVES for USDN. Oracles will read the price of the asset and …

Global regulators should grant Facebook-backed cryptocurrency Diem “the benefit of the doubt” to greenlight its launch in 2021, a top executive at Facebook Financial said. David Marcus, the head of Facebook Financial, or F2, said that both cryptocurrency Diem and related crypto wallet Novi could be launched next year. Speaking at the Singapore Fintech Festival 2020 on Dec. 8, he stated that regulators should finally let Facebook move forward with its cryptocurrency: “I don’t think what we are asking for is just immediate trust. I think [...] what we’re asking for is at least to have the benefit of the …

Facebook’s Diem stablecoin, which recently changed its name from Libra, is still failing to impress German regulators. As reported by Reuters, German Finance Minister Olaf Scholz voiced his criticism of the project on Monday after a conference between G-7 finance ministers and central bank directors. Scholz called Facebook’s project “a wolf in sheep’s clothing,” highlighting that changing its name would not change its fundamentals. According to him, Facebook and the Diem Association have failed to adequately address its regulatory risks. Until that is done, the German government “will not accept its entry into the market.” Before renaming itself, Libra had …

One of the leaders in U.S. crypto is optimistic that the space will grow under the administration of Joe Biden governing from the middle. Jeremy Allaire, CEO of Circle, took to CNBC's Squawk Box on Monday to argue that the Biden administration will push crypto forward as part of a broad effort to update infrastructure: "I think that they will ultimately be supportive because this is an infrastructure change as big as the initial commercial internet, and they're going to be focused on infrastructure changes that make America more competitive." Overall, moderate politics benefit crypto, Allaire reasoned: "You've got moderates, …

Facebook, it is reported, could launch its long-awaited digital currency as early as January 2021 in the form of a U.S. dollar-backed stablecoin. Central banks and regulators have been galvanized into action since Facebook first announced its intentions by publishing a white paper in 2019. They are right to be concerned, as stablecoins — particularly ones such as the rebranded Diem that have the potential for massive network effects — bring new risks to consumers and savers as well as to the global financial system. Related: What Is Libra? Breaking Down Facebook’s New Digital Currency But they also have the …

On Wednesday night, Congresswoman Rashida Tlaib introduced a bill before the U.S. House of Representatives looking to make fiat-pegged stablecoin operators abide by the same rules and registration requirements expected of banks. The legislation, under the name “the Stablecoin Tethering and Bank Licensing Enforcement (STABLE) Act,” sets out a fresh and extremely expansive definition of stablecoin. It furthermore dictates a series of limitations that outlaw stablecoin issuance for any entity that is not “an insured depository institution that is a member of the Federal Reserve System,” More aggressively, one of the bill’s provisions would make it: “Unlawful for any person …

Every Friday, Law Decoded delivers analysis on the week’s critical stories in the realms of policy, regulation and law. Editor's note For several weeks, rumors have circulated in the United States that the Treasury Department under Steven Mnuchin is planning some sort of rulemaking to ban or severely restrict self-hosted cryptocurrency wallets. The Treasury hasn’t made any public statements to support these rumors, but they are persistent and pervasive enough to be worth paying attention to. In the broader cycle of financial news, Secretary Mnuchin is currently under a lot more scrutiny for his plans to return nearly half a …