Author: MYKEY researcher Yao Xiang

To help crypto market participants keep updated on the development status of stablecoins, we launched the MYKEY Stablecoin Report to share our interpretation of the development status of stablecoins and analysis of their development trends. Looking forward to maintaining exchanges with peers and jointly exploring the development prospects of stablecoins. Welcome to leave suggestions.

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1. Overview of Stablecoin Data

1. Overview of Stablecoin Data

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Source: MYKEY, CoinMarketCap, Coin Metrics

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Source: MYKEY, Coin Metrics

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Active addresses

Source: MYKEY, Coin Metrics

Source: MYKEY, Coin Metrics

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Source: MYKEY, Coin Metrics

Source: MYKEY, Coin Metrics

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Source: MYKEY, Coin Metrics

Source: MYKEY, Coin Metrics

The average daily transaction volume of major stablecoins increased by $604 million, or 13.97%. On October 26, Harvest Finance was attacked to steal 34 million US dollars, and the transactions on the chain fluctuated greatly (the peak in the figure). If the influence of the data of the day is removed, the increase can be corrected to 37.97%.

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2. Stablecoins are booming

The entire stablecoin ecosystem is thriving and developing. The volume of funds has steadily increased, and the decentralized stablecoin DAI has reached a milestone of US$1 billion; financial services are becoming more and more perfect, and the compliant stablecoin USDC plans to provide a deposit plan with the highest annualized return of 10.75%; benchmark products are coming soon, and Libra may be launched in 2021 Officially released in January.

DAI Supply Breaks $1 Billion

On November 13, 2020, DAI’s supply topped $1 billion, just 71 days after it topped $500 million. The rapid growth of data, on the one hand, comes from the demand side, liquidity mining and rising market trends make the demand for DAI continue to grow; on the other hand, it also comes from the supply side, the debt ceiling of ETH-A has been raised to 490 million US dollars, The debt ceiling of USDC-A has also reached 485 million US dollars, and the utilization rate exceeds 80%. The USDC locked in the Maker agreement has accounted for 13% of the total USDC supply. In contrast, the contribution of new mortgages to the generation of DAI is limited. Since October, the new mortgage assets COMP, LRC, LINK, BAL, YFI, and GUSD have contributed a total of USD 26.3 million to DAI, accounting for 2.5% of the total , accounting for only 0.5% except YFI. (Data source: https://daistats.com)

Circle Announces High-Yield Savings Plan Up to 10.75%

On November 5, 2020, Circle officially announced that it will soon provide USDC current and regular savings plans. According to the official website page, the current interest rate is 8.5%, and there are four types of regular plans: 1 month, 3 months, 6 months, and 1 year, with interest rates ranging from 9.5% to 10.75%. Circle will partner with Genesis Global Capital on the savings product, which earns the proceeds from lending U.S. dollars to institutional counterparties willing to pay interest.

At present, the savings product has not been officially launched yet, and users can fill in the information to apply to join the waiting list.

Financial Times says Libra could come out as early as January 2021

Libra's exact launch date will depend on when the project receives approval from the Swiss Financial Market Supervisory Authority (FINMA) to operate as a payment service, but could be as early as January, three sources said. FINMA said it would not comment on the Libra application.

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3. Stablecoins accelerate the pace of exiting the circle

Stablecoins are accelerating out of the circle, not only attracting the attention of more national or international regulators, but also gradually expanding their application scenarios. In November, Circle announced the use of USDC to aid Venezuelan medical staff, showing that the application of stablecoins is not limited to the world of cryptography. After the European Commission, the G20 Group Joint Financial Stability Committee, and the International Monetary Fund successively released regulatory reports on stablecoins in October, the British Ministry of Finance stated that it would formulate a regulatory framework for stablecoins, and the Bank for International Settlements (BIS) also issued a stablecoin regulation. currency regulatory reports.

Circle Uses USDC to Aid Venezuelan Healthcare Workers

In November, the supply of USDC has reached 3 billion US dollars, and its application scope is gradually integrated with the real world. According to the official website of Circle, Circle has cooperated with the local government and the financial platform AirTM to distribute funds to COVID-19 medical workers in South American countries, and this process is completed through USDC.

According to Lianwen, the specific process can be simplified as follows: the U.S. Treasury Department and the Federal Reserve release funds into Guaidó’s government account in a U.S. bank, and the Guaidó government uses these funds to mint USDC and send them to the U.S. dollar-denominated zone. Airtm, a block chain payment platform, is distributed to the accounts of Venezuelan medical staff in the form of AirUSD, and medical staff can withdraw to local bank accounts.

UK Treasury to Develop Stablecoin Regulatory Framework

In a Nov. 9 Treasury statement, Chancellor Rishi Sunak said the government's approach to financial services would be guided by the most productive and innovative sectors after the UK leaves the European Union. The UK’s financial sector should “lead the global conversation on new technologies such as stablecoins and central bank digital currencies,” which would cement the UK’s leading position in fintech.

The statement mentioned that new technologies such as stable coins may change the way people store and trade currencies, making payments cheaper and more convenient. In order to realize the potential value of stablecoins, while managing risks to consumers and financial stability, the government will propose a regulatory approach to relevant stablecoin schemes to ensure that they meet the minimum requirements for payment methods.

BIS Publishes Stablecoin Report Detailing Risks, Opportunities and Regulation"On November 24, the Bank for International Settlements (BIS) released a work report on stablecoins - "Stablecoins: Risks, Opportunities and Regulation", detailing the potential role of stablecoins and their implications for regulation. The report outlines the market development of existing stablecoins and describes their potential to embed powerful monetary tools in the digital environment, arguing that stablecoins are designed to challenge existing e-commerce digital payment methods, including traditional bank payments, credit cards and e-wallet etc. At the same time, stablecoins, especially the Libra project led by Facebook, also pose challenges to the global financial system. The report analyzes and discusses the Libra project and related regulatory countermeasures, and believes that the regulation of stablecoins should be based on the many conveniences it may provide, not limited to the existing regulatory framework, and can be considered to achieve"Embedded supervision