Federal Reserve shares details on ‘FooWire’ distributed ledger experiment
The U.S. Federal Reserve published details about a 2019 payments trial involving distributed ledger technology, specifically the Hyperledger Fabric blockchain software. The so-called “FooWire” experiment was designed to test whether the technology is suited for payments application. FooWire was “small-scale” and specifically focused on permissioned capabilities. The network included three hypothetical organizations: a central bank, a government agency, and a commercial bank. Network administrators were responsible for approving and creating accounts and nodes to administer the ledger. The only asset that could be transferred between nodes was an artificial asset called Funds.
Unpacking the Avit, Avanti Bank’s New Digital Asset Being Built With Blockstream
Avit will be commercial bank money or programmable electronic cash, redeemable at par with a U.S. dollar issued by Avanti Bank. It’s not a security token, or a digital representation of an investment that’s expected to generate returns. Unlike cash, stablecoins are generally issued as intangible assets, which means they aren’t physical or don’t derive their value from contractual claims like stocks and bonds do. Because of this, they have uncertain legal enforceability. Most U.S.-issued stablecoins exist under Article 8 of the Uniform Commercial Code, which requires they have intermediaries.
Avit will be issued on Liquid – a network developed and overseen by Blockstream that is meant to move bitcoins around more quickly than the Bitcoin blockchain itself. Assets on Liquid can be traded in atomic swaps, or smart contracts that allow for exchanging assets without an intermediary. Avit would not be pegged one-to-one to the U.S. dollar, but it would be 100% backed by a reserve comprised of Federal Reserve deposits and U.S. Treasurys. But Avit could effectively become a dollar equivalent if Avanti provides an easy pathway for it to be exchanged for a dollar. In this way, Avit would represent a certificate of deposit or a unit that is redeemable at any time against the U.S. dollar.
Nigerians Are Using Bitcoin to Bypass Trade Hurdles With China
Some Nigerians are becoming reliant on using bitcoin as a way to trade internationally, and are finding bitcoin has significant benefits over legacy financial systems. Nigeria’s economy is heavily import dependent and China is a major import partner to Nigeria. Nigerians have to struggle with this process, though. Access to FX for importation by Nigerian business owners is highly limited because the Central Bank of Nigeria has been rationing foreign exchange in efforts to protect the local currency amid the crash in oil prices and coronavirus outbreak. So importers typically rely on the black market for the additional FX needed and that comes at a very high price. But Chinese exporters have expressed willingness to accept bitcoin payments for their goods; hence, many business people in Nigeria find it more convenient to make such payments with bitcoin.
cLabs Acquires Summa to Boost Crypto Interoperability on Celo
Celo’s cLabs acquired the decentralized finance (DeFi) startup Summa, best known for making wrapped Ethereum tokens that can represent locked amounts of bitcoin. Summa’s technical expertise in cross-chain architecture will enable seamless interoperability between Celo and various layer-one blockchains.
Posted from Diigo: https://www.diigo.com/user/kiffmeister/Fintech
