Kiffmeister’s #Fintech Daily Digest (08/13/2020)

Coinbase to Offer Bitcoin-Backed Loans to US Customers

Coinbase will allow U.S. retail customers to borrow fiat loans against as much as 30% of their bitcoin holdings in the fall. Credit lines will be capped at $20,000 per customer and an interest rate of 8% will be pffered for bitcoin-backed loans with terms that are a year or less. The exchange says it won’t reinvest the collateral elsewhere and will keep the bitcoin at the exchange, unlike some crypto lenders who rehypothecate collateral or invests deposits into perpetual swaps. The new Coinbase product is only available in the following states: Alaska, Arkansas, Connecticut, Florida, Georgia, Illinois, Massachusetts, New Hampshire, New Jersey, North Carolina, Oregon, Texas, Virginia, Nebraska, Utah, Wisconsin and Wyoming. 

Chinese state-run banks start testing PBoC’s ‘e-wallet

China’s largest state-owned banks have reportedly started testing the “electronic wallet” component of the People’s Bank of China’s (PBOC’s) “digital yuan” project. The tests are being conducted in cities including Shenzhen, which borders Hong Kong. The municipal government of Shenzhen said it would cooperate in efforts to test the system for different applications. Banks are testing the e-wallet application to transfer money and make payments using the PBoC’s digital yuan. The e-wallet, which can be downloaded as a mobile application, will be linked to a user’s national ID number or telephone number to enable fund transfers. 

DeFi Meme Coin YAM Succumbs to Fatal ‘Rebase’ Bug, Makes Plans for ‘YAM 2.0

DeFi meme coin YAM has succumbed to a bug within its rebase function, meaning the coin has lost control of its on-chain governance feature. Yam was an elastic supply crypto-asset, where the supply expands and contracts in response to market conditions with the aim of pegging the value of a Yam to the U.S. dollar. 10% of each supply expansion (“rebase”) is used to buy yCRV, a high-yielding basket of USD stablecoins, which is allocated to the Yam treasury which is controlled via community governance. Holders of any of eight eligible tokens, which included Compound and Maker, could stake them into Yam’s front-end and start earning YAM. 

From Decrypt: In the 24 hours following the August 11 launch, the total-value-locked (TVL) into the Yam Finance system peaked at around $600 million. However, soon after that, the developers found a bug in the smart contract code that would have minted too much reserve instead of rebalancing supply. A Yam proposal called for locking up 160,000 YAM in a smart contract to save the network, one that would have rewarded farmers and benefactors with more YAM if the target was met; which it was. But the network then discovered a further flaw: the smart contract would still not work as intended, regardless of the 160,000 YAM locked up earlier.

While no assets staked in Yam were lost, Yam’s market capitalization dropped to zero as the price crashed and holders withdrew. See also: YAMpocalypse Now: How hubris and speculation smashed the latest DeFi Token.

Brazil unveils nitty-gritty of instant payment tool

Banco Central do Brasil unveiled the general framework and updated rules for the country’s instant payment system PIX, which will be launched gradually from November 16. From October 5, those interested in joining the system will be able to register the so-called PIX Keys, which will identify the payer and payee. To use the central bank’s platform, users will need an email address, phone number or taxpayer ID. There will be three ways to complete the transfer: by entering the recipient’s data, by using a QR code or by using a payment link. The central bank will both regulate and provide the payment settlement infrastructure, including the database with data on the accounts of recipients. Participating financial institutions will pay 0.01 reais per transaction to use PIX, versus an average of 0.07 in the current TED system. The minimum capital required is 1 million reais.  

New Bill in Germany Proposes to Digitize Securities With Blockchain

Germany’s Federal Ministry of Finance (BMF) and the Federal Ministry of Justice and Consumer Protection (BMJV) introduced a draft bill on blockchain-based digital securities. It would allow securities to be secured using blockchain technology, as opposed to paper certificates, as current legislation requires, thereby enhancing liquidity and compliance. The proposed draft bill make the Federal Financial Supervisory Authority (BaFin) responsible for monitoring the issuance of digitized securities and the maintenance of decentralized ledgers in accordance with the German Banking Act.  

With $16bn in cryptocurrency, Ripple attempts a reset

Ripple can lay claim to having created one of the most valuable crypto-assets. Its XRP digital tokens have a total value of almost $30bn, behind only bitcoin and Ether. But, eight years after launch, Ripple is still trying to find compelling uses for the blockchain technology underpinning its currency that would justify such a high figure. Now, in an effort to draw more users, it has struck out in a new direction: to try to become the Amazon of the crypto-asset world, using its platform to support activities far beyond the original cross-border payments system it hoped to build. 

Posted from Diigo: