Kiffmeister’s FinTech Daily Digest (08/02/2020)

The price of Bitcoin (BTC) and Ethereum’s Ether (ETH) plunged by 13% and 21%, respectively, within minutes on August 2, 2010. The move liquidated more than $1 billion worth of futures contracts as BTC/USD dropped from around $12,000 to as low as $10,550, before bouncing back to trade around $11,300. More than $1 billion of crypto positions were liquidated across various exchanges during the spike down.  
The story of stablecoins is the story of Ethereum. Driven by a global flight to safety amidst the coronavirus pandemic, stablecoin issuance ballooned over $8 billion in the first quarter of 2020. While inter-exchange settlement remains the most dominant use case for stablecoins by far, more generally, stablecoins are simply a better means of storing and moving dollars around the world. 24/7 uptime and relatively quick settlement allows users to react to market conditions much faster than when dealing with traditional payment rails.
If the Financial Action Task Force (FATF) has its way, stablecoin payments networks will no longer be able to take a hands-off approach to knowing who their users are. In a July report to the G20, FATF suggested that “central developers and governance bodies of so-called stablecoins” should be treated either as financial institutions or as virtual asset service providers (VASPs). Hence, stablecoin platforms would probably have to abide by the FATF’s Recommendation 10, which prohibits financial institutions from “keeping anonymous accounts or accounts in obviously fictitious names.” Stablecoin platforms only currently apply customer due diligence to the small minority of users who purchase, sell and redeem stablecoins for fiat currency. 
BiLira will launch TRYB, a stablecoin backed by the Turkish Lira on Avalanche during the mainnet release. Previously, TRYB was limited to the Ethereum blockchain as an ERC-20 token.