Kiffmeister’s #Fintech Daily Digest (12/20/2021)

Terra’s UST Flips DAI to Become Fourth-Largest Stablecoin

Terra’s U.S. dollar-pegged stablecoin UST is now tied with DAI as the #4 stablecoin on the market (both about $9 billion outstanding) but it’s very different from the three that sit above it. Tether’s USDT ($77 billion), USD Coin’s USDC ($42 billion) and Binance’s BUSD ($15 billion) are run and managed by centralized entities, and the assets that back them (reportedly 1:1) are also centralized. However, UST is a decentralized stablecoin backed by other cryptocurrencies. Terra itself is a layer 1 smart contract-enabled network built using the Cosmos software developer kit, and UST is minted by users by “burning” (destroying) LUNA, Terra’s native token responsible for paying transaction fees and participating in governance. DAI is also cryptocurrency backed. [Read more]

US SEC Further Delays Decisions on Bitwise and Grayscale Bitcoin ETFs

The US Securities and Exchange Commission (SEC ) has delayed decisions on physical (spot) Bitcoin exchange-traded fund (ETF) proposals from Bitwise and Grayscale until February 1 and February 6, respectively. The applications were originally filed on October 14 and 19, 2020, respectively. The SEC has been approving Bitcoin futures ETFs (ProShares and Valkyrie’s Bitcoin Strategy ETFs in October, 2020) but it has continued to maintain a hard stance on physical crypto ETFs (it denied the approval of VanEck’s physical Bitcoin ETF in November 2020, and WisdomTree’s in early December). The SEC is concerned that the spot Bitcoin market is prone to fraud, manipulation and abuse, whereas Bitcoin futures trade on highly regulated exchanges. [Read more]

Other Bitcoin ETFs applications that have been repeatedly delayed include Kryptoin (on September 29 was pushed out to December 24),  Valkyrie (on November 11 was pushed out to January 7) and Global X (pushed out on November 18). And VanEck’s application was rejected outright on November 12, and WisdomTree’s on December 1.

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