Blockchain Bites: Rethinking Libra, Craig Wright and Something Smells Fishy in Blockchain

Top financial authorities are rethinking what a "basket-backed" stablecoin means for monetary sovereignty.

The Bank for International Settlements (BIS) issued a new report claiming stablecoin initiatives like Libra haven't driven central banks to explore CBDCs, Craig Wright is heading to trial and BTCPay received its largest donation to date. Here's the story:

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Rethinking Libra
The Bank for International Settlements (BIS) rejected the popular narrative that private-sector stablecoin proposals like Libra have been key in spurring the issuance of CBDCs in a new report. Instead, the BIS said central bankers have come around to CBDCs because the tech presents a convenient vehicle for shaping the future of payments. Meanwhile, the U.S. Federal Reserve issued a report showing “basket-backed” stablecoins, like Libra, could improve consumer welfare in certain economic scenarios. (The Block)

Getting Fishy?
The Norwegian Seafood Association has teamed with IBM and Atea, a technology firm focused on the internet of things (IoT), to create a blockchain-based track-and-trace system for sustainably farmed salmon in Norway. The five associated fisheries see this as a way to ensure the quality of its salmon and the national brand. Meanwhile, Braintrust launched Wednesday with a blockchain-based employment service that will cut out middlemen like ZipRecruiter and Indeed from hiring decisions. It’s a fork of the DeFi protocol Compound, backed by a $6 million seed round featuring True Ventures, Homebrew Ventures, Uprising Ventures and Galaxy Digital, among others.

Legal Review
Craig Wright is heading to a jury trial in a case that involves billions of dollars in bitcoin. The move comes after the plaintiffs were denied a motion filed in May attempting to sanction Wright over his alleged misbehavior. While the judge was concerned by Wright’s behavior, she ruled in favor of Wright to dismiss the motion, saying the matter was best left “for a jury to make as fact finder at trial.” Elsewhere, in an early instance of Singapore authorities enforcing its updated digital currency regulations, a 23-year-old woman was charged with breaking the city-state’s ban on unlicensed bitcoin sales on Wednesday. The woman allegedly bought S$3,350 (about $2,400) in bitcoin in late February 2020 using funds the police say came from the proceeds of an online scam.

Cyber Crime?
CipherTrace found bitcoin ATMs were frequently used to send funds to “high-risk exchanges” – trading platforms the company considers to be known for facilitating criminal activity and money laundering. “The percentage of funds sent to high-risk exchanges from U.S. BATMs [bitcoin ATMs] has seen exponential growth, doubling every year since 2017,” the report reads. Meanwhile, Australians have lost more than $14 million to crypto investment scams in 2019, according to a report from the Australian Competition and Consumer Commission. (The Block)

Money Matters
Avalanche blockchain developer AVA Labs has closed a $12 million private sale of its AVAX token. The funding round was co-led by Galaxy Digital, Bitmain, Initialized Capital, NGC Ventures and Dragonfly Capital. The sale precedes a planned public offering of the Avalanche token to U.S. accredited investors and non-U.S. citizens. Separately, cryptocurrency exchange Kraken has donated $150,000 in bitcoin to BTCPay Foundation, the entity managing BTCPay, a popular open-source tool for merchants accepting bitcoin payments. This is the largest donation in BTCPay’s history, which, as a free service, relies on donations to run and to fund developers making improvements to the app. Finally, cryptocurrency exchange FTX has launched eight unique index futures and volatility markets in less than 12 months. Popular with professional algorithmic and quantitative traders, these novel indexes suffer from a lack of liquidity.

Quick bites

• Bitcoin is seeing little more merchant usage than five years ago, despite the COVID bump
• USDC will launch on Algorand
• The Principality of Monaco will use security tokens for "ESG" projects
• ConsenSys and AMD have pumped $20 million to triple its GPU capacity, and no one knows why
• Senate Republicans entered a bill that could destroy encryption for WhatsApp, Signal and Telegram (Decrypt)

Market intel

Derivatives, Wrinkles
Bitcoin’s derivatives continue to grow despite light spot trading over the past two months. The cryptocurrency’s options market is on its way to a record $1 billion monthly expiry this Friday. But there's added complexity: volumes have dropped precipitously, just as open interest has boomed. What’s going on? Options activity may have hit a high at $226 million on June 2, but activity has still gone south. Volumes came in at around $80 million June 23, down nearly 62% from its peak. Derivative trading volumes usually increase during periods of pronounced volatility, like March 12, when the bitcoin price fell by nearly 40%, daily volumes clocked a record $45 billion. A recent fall in trading volumes could, therefore, be down to the fact bitcoin has been pretty dull recently.

Nearly Quarterly Gains
Bitcoin looks set to end its three-quarter losing run despite having dropped to $9,000 earlier on Thursday. At 03:35 UTC, the leading cryptocurrency by market cap printed a low of $9,002, extending Wednesday’s 3.5% decline, a pullback that could be associated with risk aversion in the traditional markets fueled by mounting trade tensions, renewed coronavirus fears and the International Monetary Fund’s decision to downgrade global growth forecasts. Even so, bitcoin is still up 44% from the April 1 opening price of $6,428. A quarterly gain would be confirmed if prices hold above that level through June 30.

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