Kiffmeister’s Fintech Daily Digest 04/18/2020

Why This Global Crisis Is a Defining Moment for Stablecoins
Over the past month, stablecoins have lived up to their moniker and value proposition. We’ve seen a flight from traditional crypto assets to stablecoins similar to 2018. The market cap of all stablecoins has swelled from $5 billion at the start of the year to above $8 billion in April. And the improved stability and usability of stablecoins equips them to rise to the occasion and prove utility beyond demand from exchange arbitrage and safe haven appeal.

Effective Cryptocurrency Regulation Through Blacklisting
“In this paper, we discuss the intricacies of blacklisting, how it would change the Bitcoin ecosystem and how it can remain effective in the presence of privacy-preserving cryptocurrencies. We hope this paper provides a starting point for discussions among researchers, regulators and the cryptocurrency ecosystem around blacklisting.”

The importance of technology in banking during a crisis
Banks that adopted IT more intensely before the Global Crisis were significantly more resilient when the shock hit. These banks had significantly fewer non-performing loans, and issued more loans during the crisis itself. Loan-level analysis indicates that high IT adoption banks issued mortgages with better performances and did not offload low-quality loans.

What Does Grayscale’s GBTC Falling Premium Tell us About Bitcoin Price?
While the premium in GBTC has usually increased after private placement events and especially during Bitcoin price rallies, it’s possible that the GBTC and Bitcoin price will see a narrower gap from now on. As new options for institutional investors appear in the market, competition may drive these premiums down.

Synthetix Explores Adjusting sUSD Liquidity Incentives with SIP 51
Synthetix – the permissionless derivatives protocol – is exploring adjusting its economic incentives for liquidity providers across sETH and sUSD pools. sETH acts as the primary on-ramp for Synthetix users, sUSD also acts as a critical off-ramp. Therefore, there must be high confidence (and liquidity) in the stability of the sUSD peg at $1. The added SNX incentives to Curve will aid in sUSD maintaining its $1 peg and assurance for liquidity providers that the incentives will exist in the long term.

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