Author: MYKEY researcher Yao Xiang

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1. Overview of Stablecoin Data

In the past month (December 1, 2020 to December 31, 2020, the same below), the data of various stablecoins has increased significantly.

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Source: MYKEY, CoinMarketCap, Coin Metrics

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Source: MYKEY, Coin Metrics

Among them, the main growth came from Tether. Tether issued a total of 1.850 billion, specifically 1.000 billion for Ethereum and 850 million for TRON. The circulation of USDC has increased by 940 million, reaching 4 billion US dollars on December 31, 2020 (from Circle's official website), of which 3.913 billion is on Ethereum, and the rest is on Solana and Algorand. It needs to be emphasized that most of the media, including Forbes, only count the data on Ethereum, which is inaccurate. The market capitalization of the rest of the stablecoins has not changed much.

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Source: MYKEY, Coin Metrics

Last month, the average number of daily active addresses of major stablecoins was 227,000, an increase of 0.12% from the previous month.

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Source: MYKEY, Coin Metrics

The daily average number of transactions of major stablecoins increased by 2.50% from the previous month. Among them, the growth rate of DAI is significant, from an average of 14,000 transactions per day to 20,300 transactions, an increase of 45.2%.

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Source: MYKEY, Coin Metrics

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2. The boundaries of stablecoins continue to expand

The entire stablecoin is still thriving and the ecology is flourishing. The volume of funds has steadily increased, and the monthly supply of major stablecoins has increased by US$3 billion, of which USDC has increased by US$1 billion in one month, with a total supply of US$4 billion, and the total supply of BUSD is also close to US$1 billion; issued Entities and platforms are more abundant, the euro stable currency EURB is launched on the Stellar network, and HUSD announced that it will be deployed on the Nervos blockchain.

Major Stablecoin Supply Increases by $3 Billion Monthly

In December 2020, the supply of major stablecoins increased by $3 billion on a monthly basis, with the main contributions coming from USDT and USDC ($1.85 billion and $940 million, respectively). The total supply of stablecoins reached $28.2 billion, doubling in 5 months.

Euro Stablecoin EURB Launched on Stellar Network

On December 9, 2020, Stellar's official website announced that the euro stablecoin EURB is now online. This is the first stablecoin directly issued by a banking institution on the Stellar network, and it is also the first issuance of this type of stablecoin on the market. The specific issuance method of EURB is that Bitbond, a blockchain technology service provider, provides operations such as the issuance and redemption of EURB on the Stellar network, while the euro is hosted at BVDH Bank (Bank von der Heydt). BVDH board member Philipp Doppelhammer said that EURB will be integrated into DTransfer, a payment service based on the Stellar network provided by SatoshiPay.

Bitbond issued a security token approved by the German Federal Financial Supervisory Authority (BaFin) in 2019.

HUSD will be deployed on the Nervos blockchain

On December 8, 2020, according to the official Nervos blog, the compliant stablecoin HUSD will be deployed on the Nervos blockchain, becoming the first fiat-backed stablecoin on Nervos. At the same time, Nervos will also become HUSD deployed outside of Ethereum The first permissionless blockchain.

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3. The stablecoin bill sparks controversy

The regulatory issue of stable currency continues to heat up. On December 4, members of the US Congress proposed the "Stable Coin Act (STABLE Act), which aims to regulate the issuance of stable currency and "protect consumers from the risks brought by emerging digital payment tools." ", to prevent the emergence and growth of an abusive, opaque and stablecoin-based shadow banking system. The bill is awaiting approval, and no doubt the proposal has sparked intense controversy in the cryptocurrency community.

The Stablecoin Act Attempts to Rein in Stablecoins

According to the official website of the U.S. Congress and Forbes reports, the Stablecoin Act includes the following contents. First, issuers of stable coins need to comply with state laws or money transfer laws; second, they must fully comply with existing banking regulations; Finally, stablecoin issuers need to obtain FDIC insurance or deposit reserves directly at the Federal Reserve, while the current issuer’s approach is to cooperate with financial institutions covered by FDIC.

The proposal is awaiting approval, read another Forbes report. The article believes that there are two major risks in the current stablecoin ecology, one is KYC/AML, users holding stablecoins cannot belong to a prohibited set, and should be associated with their identities to report to the tax system; The proportional exchange relationship between US dollars needs to be realized through sufficient reserves. This may have been the MP's motivation for sponsoring the bill.

Controversy continues in the cryptocurrency community

Although the bill has yet to be ratified, it has undoubtedly sparked controversy in the cryptocurrency community, especially from stablecoin issuers. Circle CEO Jeremy Allaire stated on his personal Twitter that the bill is a huge step back in digital currency innovation in the United States and limits the development of the blockchain and financial technology industries. He believes that the cryptocurrency industry is providing solutions that fundamentally improve the speed and accessibility of U.S. and global payments and banking services, reduce costs, and improve efficiency. Congress should support open innovation instead of forcing non-bank financial technology companies to bear the burden. Huge regulatory burden from the Fed and FDIC. The technical and governance standards for stablecoins should be negotiated and take into account new forms of regulatory charters. Circle looks forward to working constructively with federal agencies and the private sector as they continue to innovate in this area. In addition, Jeremy Allaire also sent an open letter to the U.S. Department of the Treasury stating the status quo of USDC development and responding to FinCEN’s proposed non-custodial wallet transaction reporting rules.

According to the compilation of CoinTelegraph, other opinion leaders also expressed their opposition. Meltem Demirors, chief strategy officer of CoinShares, said that "cryptocurrency reduces the cost of providing services to people who have historically been excluded from the banking sector. If the bill is introduced, service costs will increase and compliance will become more difficult. Instead, it will put the cart before the horse." Tyler Lindholm, member of the Wyoming House of Representatives, believes that the bill violates the basic spirit of the decentralized system. The cryptocurrency industry has provided financial services for people without bank accounts, and centralized power is not suitable for a decentralized world. Shapeshift CEO Erik Voorhees also believes that the bill is doomed to fail and cannot force the crypto industry to operate like banks.