Perhaps the biggest news of last week is Andrew Bailey, the governor of the Bank of England (BoE), said stablecoins need global regulation, warning private issuers that an international regulatory framework could be crafted soon. Bailey on Thursday called on regulators to cooperate on a "global response" so they can effectively regulate stablecoins. He noted the international nature of stablecoins means failure to coordinate globally could result in confusion and regulatory fragmentation. Though Bailey conceded that stablecoins can reduce frictional costs, he urged private issuers to boost their backing of stablecoins to better ensure redemption with the underlying fiat currency. Bailey also noted that some stablecoin proposals, unlike volatile Bitcoin (BTC), could grow to be the primary means for purchasing goods and services in the future. Finally, Bailey claimed discussions on stablecoins being backed by multiple asset classes are still premature, possibly throwing shade at Facebook's
Here is the rest of the week in review:
Brazil's central bank announced it is possible the country could be ready for a central bank digital currency (CBDC) in 2 years. Banco Central chief Roberto Campos Neto said Wednesday at a Bloomberg event that Brazil could be prepared for a CBDC by 2022, just a week after the central bank established an intergovernmental CBDC study group to review the potential benefits of a national digital currency. Campos Neto noted that by 2022, Brazil will boast an interoperable instant payments system and a "credible" and "convertible" international currency, resulting in "all the ingredients to have a digital currency." He even argued that CBDCs are the logical consequence of fast-digitizing financial systems such as Brazil's. The bank chief's comments come as Banco Central is taking its PIX central bank-managed instant payments system online in November and debuting an Open Banking initiative later this year.
Binance announced Binance Liquid Swap, a new trading platform and rival of decentralized exchange Uniswap meant to capitalize further on the DeFi boom. The top exchange said on Friday users would be able to provide liquidity and make trades or "swaps," with 3 trading pairs initially from their exchange accounts. Binance Liquid Swap is an automated market maker (AMM) exchange where smart contract-based liquidity pools set spot prices and facilitate swaps. Users can serve as liquidity providers by depositing digital assets into the pools, receiving interest and a percentage of transaction fees in return. Binance wrote that Liquid Swap is the first AMM platform to be launched on top of a centralized exchange. A Binance spokesperson noted the firm wants to offer users a more secure and seamless AMM product while allowing them to earn in a similar way as on decentralized AMM exchanges.
Crypto prices tumbled to $324 billion this week, mirroring the stock market selloff. For the majors, all except Tether (USDT) fell, with Chainlink (LINK) and Polkadot (DOT) posting the worst losses. In the top 100, the biggest losers were Ampleforth (AMPL), down 59%, Balancer (BAL), down 48%, and Aragon (ANT), down 47%. The biggest gainers were BitShares (BTS), up 65%, CyberVein (CVT), up 51%, and Flexacoin (FXC), up 16%. Next week traders will see if Bitcoin can rebound and stay above $10,000.
The author owns a small amount of BTC.