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Libra Criticism; Friday Metrics Watch #14

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June 21 · Issue #200 · View online
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Less than a day after the much-awaited Libra launch, we are already seeing regulators expressing their reservations about having a global, blockchain-powered, borderless currency for payments, powered by a Valley behemoth. Libra may not be a security under SEC’s lodestone Howey test; there is not a reasonable case of future profit expectations as its value is expected to be relatively stable. However, the presence of a new form of currency that is not controlled or issued by a central bank will be of concern to many governments across the world. Unlike in the case of bitcoin, which is an existential threat theoretically to central banks but is still not quite a mainstream phenomenon in terms of adoption, Libra has the heft of Facebook and the user base that Facebook and the Libra Association members bring to the fore.
Given this context, regulators are not sitting still. For instance, with the increasingly likely ban on cryptocurrencies by the Indian government, Facebook’s Libra project will suffer a setback as it will not be able to allow its 200 million WhatsApp users in India to use Libra for p2p payments. Moreover, with Libra expected to make remittances cheaper by significantly reducing the transaction costs, the benefits of cheaper crypto-powered remittances will not be available to the recipients in the world’s biggest remittance corridor. With around 10-12 months to go before the actual launch of Libra, it will be interesting to see whether Facebook can convince regulators around the world to come on-board as well, for the project to be successful on a global scale. It is not going to be easy, but we believe that they will to a large extent be able to do so, especially with the network of partners they have on-boarded on the Libra platform.
You can catch up on our previous editions on Libra here and here.
Perhaps also as a result of fears around increased scrutiny in a post-Libra environment, privacy coins make up 3 of the top 5 week-on-week top gainers. Grin ( which we covered at length earlier) is up 40%! Zcash and Monero, the two secrecy coin majors are also in the top 5.
Source: Circle Research
Source: Circle Research
Ethereum Locked in DeFi
MakerDAO still accounts for a lion’s share of ETH locked up in collateral, with more than 1.64 million of ETH locked up. Uniswap showed a strong w/w decline of 8% in ETH locked up and Augur showed a w/w decline of 10%, while Compound has seen a w/w growth of 5%. ETH locked up in Maker was almost flat w/w.
Lightning Network Growth:
Capacity per channel showed a moderate decline of 2% w/w. The total number of nodes increased w/w by 2%, and the total number of channels increased by 1%.
(For reference, some previous articles on LN, here).
DEX Tracker:
Trading volumes on DEXs have increased on a w/w basis, with the average daily trading volume averaging 35k ETH for this week. IDEX remains the biggest DEX in terms of trading volume and DAI is the highest traded cryptocurrency on DEXs.
(For reference, some previous articles on DEXs, here and here).
Crypto Loans Tracker:
Compound Loans:
Total loans issued on Compound for the last week stands at approx. $1.4 million for the week, a steep decrease from $4.2 million in the previous week. WETH is the most borrowed cryptocurrency on Compound followed by DAI and BAT.
Dharma Loans:
Total loans issued on Dharma Lever for the last week stands at approx. $140k for the week, a slight increase from the previous week. DAI is the most borrowed cryptocurrency on Compound followed by WETH and USDC.
MakerDAO Loans:
DAI loans issued on MakerDAO for this week stand at ~$5.5 million, a meaningful increase from $4.2 million last week. The total outstanding DAI debt currently stands at ~$85 million.
(For reference, some previous articles on MakerDao, here and here).
You can also check out last week’s Metrics Watch here.
Meanwhile in Crypto Wonderland....
“More Info On Indian Crypto Regulation”
Since local media started reporting on the leaked information of India’s unannounced cryptocurrency bill, numerous discussions have ensued over what it entails. A number of Right to Information (RTI) applications have been filed regarding the proposed regulation and, so far, four different government bodies have replied. They are from the Department of Economic Affairs (DEA), the Reserve Bank of India (RBI), the Insurance Regulatory and Development Authority of India (IRDAI), and the Investor Education and Protection Fund Authority (IEPFA) under the Ministry of Corporate Affairs (MCA).
“G7 Task Force To Look At Libra”
France is creating a G7 task force to study how central banks ensure cryptocurrencies like Facebook’s Libra are governed by regulations ranging from money-laundering laws to consumer-protection rules, France’s central bank governor said on Friday. Governor Francois Villeroy de Galhau said the task force would be led by Benoit Coeure, a European Central Bank board member. Facebook Inc announced plans this week to introduce a new global cryptocurrency called Libra, part of an effort to expand into digital payments.
“CME Open Interest For Bitcoin Futures Reach All-time High”
Today’s Financial Action Task Force’s (FATF) announcement focused on digital currency’s role in money laundering and heightened regulation, as Secretary Steven Mnuchin noted in his closing remarks. The FATF — an intergovernmental organization that focuses its efforts on fighting money laundering — is planning to strengthen control over cryptocurrency exchanges to preclude digital currencies from being used in money laundering and related crimes.
“Facebook On Crypto Hiring Spree”
Fresh off releasing the white paper for its Libra cryptocurrency, Facebook is looking to hire a finance program manager in blockchain, according to a new job posting. The job description gives few specifics and no mention of its relation to the Libra project. Facebook’s career website now has 26 blockchain-related job openings, who would join the former staffers of the blockchain startup Chainspace whom Facebook hired earlier this year.
Crypto Twitter Pick
Spencer Applebaum
1. ETF could be approved in Oct 2019
2. Bakkt tests in Jul 2019
3. Cambridge Assoc. report
4. Yale endowment invests in 2 crypto funds
5. BTC Futures volumes surged in May
6. Fidelity offering custody + execution

Along with macro situation, how can you not be bullish BTC today?
7:53 PM - 20 Jun 2019
What We Are Reading / Listening To
Overnight Performance of Top 10 Currencies
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