Will deposit tokens unseat stablecoin issuers?

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Hello there,

With the crypto winter hopefully dying down, many platforms are looking toward the future. On the horizon is the US Securities and Exchange Commission, which has called open season on any and all crypto platforms connected to the US.

Since most stablecoins are backed by – or at least tied to (in the case of algorithmic stablecoins) – the US dollar, many financial institutions are looking for alternatives.

The solution may lie down under, writes Shihan Fang. While Australia may not be the most crypto-friendly country at the moment, its stance on stablecoins appear to be an exception. In this week’s Deep Dive, she breaks down what banks and crypto-native firms are doing in the sector and explores a cousin of the stablecoin: deposit tokens.

— Scott

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🤿 THE DEEP DIVE

Australia stablecoins show promise as a16z-backed Archblock eyes market

If you want to talk about stablecoins, you have to talk about US dollars. The top 10 stablecoins are all pegged to the greenback.

But that is about to change, thanks to the Australian government, which is working to create a regulatory framework for the crypto sector. While no one expects the Aussies to embrace Bitcoin anytime soon, the regulations look promising for stablecoins backed by the Australian dollar.

In a two-part story, Shihan Fang explores what’s going on down under. First, she talks to Charlie Chen, the Sydney-based managing director for TrueCoin, which is developing an Australian dollar-backed stablecoin called TrueAUD (TAUD).

In part two, Shihan looks at whether tokenized funds issued by regulated banks in Australia could be a threat to crypto-native stablecoin issuers.

The bottom line is likely to be regulation, says Ryan McCall, co-founder and CEO of Zerocap.

“Most people trust banks because they’re regulated. If something goes wrong the government or the Reserve Bank is going to step in,” he says.

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👀 ALL EYES ON…

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⭐ TO THE STARS

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