With China having expressed its interest in launching a state-backed cryptocurrency with the help of Alibaba and WeChat as distribution partners, it will be interesting to see how they react to Binance using Alipay and WeChat for p2p trading.
As we had noted in one of our newsletters some time ago, tolerance for ambiguity is especially high in China. There might be the letter of the law, but there is also the spirit of the law that is even more important. Official government bans have their place, which seems primarily to be to scare off the pretenders and the dilettantes. What is clear is that China will continue to be important to crypto and crypto will continue to thrive in China, at least as long as certain unspoken ‘rules of engagement’ are not violated by the various stakeholders. The above tweet thread was a rare instance where one of the key stakeholders in China strayed dangerously close to the line, maybe even crossing it for an instance before pulling back.
Multi Collateral DAI Coming Soon…
Read up some of our past coverage on DAI here
DeFi giant MakerDAO is is in the middle of a massive revamp as part of its upgrade to multi collateral DAI (DAI). The new upgrade allows users to hold their collateral in multiple ERC20 tokens, not just ETH. This could include commodity-backed tokens and ERC-20 version of bitcoin (wBTC). Using the new multi collateral system, users can gain leveraged exposure to the underlying collateral in various currencies.
Amongst the new features proposed is the DAI interest rate. Users can now earn interest on their minted DAI tokens without having to lend them out on a borrowing/lending app. The savings rate is a new monetary feature that can be adjusted to control the supply of DAI and maintain its price stability.
In addition, MakerDAO is launching a frontend portal called Oasis that allows DAI users to seamlessly borrow, save and trade DAI tokens. This is a nifty bit of forward integration, and gives MakerDAO direct access to end-users, and also puts it in direct competition with platforms like Compound, Dharma, Nuo(Juno), Instadapp etc. Remember, these DeFi platforms all use DAI extensively in their lending businesses.
Regulators’ knock Libra off balance
After the initial hype, things have been going south for Libra ever since Facebook announced the launch of Libra back in June. The project has faced severe criticism and backlash from various central bank regulators. The regulatory scepticism and the backlash have finally gotten to Libra’s founding partners as several key early supporters such as Visa, Mastercard, Paypal, eBay, etc. have announced their departure from the projects, raising serious questions over the project’s future course and its eventual success.
What probably was the proverbial final straw on the camel’s back was this letter
by a couple of US Congress members to various Libra participants. The letter, among other things, touched upon:
- Facebook’s egregious track record with data protection
- Statistics that point to child pornography still being rampant on Facebook
- Facebook’s reluctance to shoulder the responsibilities of being a financial services player with Libra, which the Congress members accuse Libra of pushing onto the various consortium members
- There was an implicit threat in the letter; Any company working with Libra would be doing so at their own risk, and might be liable to face punitive regulatory action