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U.S. GROUP SAYS CRYPTOS, NOT CENTRAL BANK ABUSES, A THREAT TO STABILITY. The United States Financial Stability Oversight Council, or FSOC, expressed alarm about the adoption of stablecoins and other digital assets in an annual report released on Friday.
Consumer trust in stablecoins might be harmed by issues like illiquidity, a lack of proper protections, opacity surrounding redemption rights, and cyber assaults, according to the FSOC.
“A run on stablecoins during strained market conditions may have the potential to amplify a shock to the economy and the financial system,” the report noted, according to cointelegraph.com.
The paper also warned about recent advancements in decentralized finance, or DeFi, in which the usage of heavy leverage might result in a fire sale if the underlying asset’s price falls. This would set off a chain reaction of margin calls and price falls. Furthermore, “users of these services incur risk of loss owing to market value changes, operational concerns, and cybersecurity attacks, among other dangers,” according to the paper. The FSOC recommends that federal and state authorities work together to pass laws on stablecoins and digital currencies, according to the report’s recommendations.
REDDIT CO-FOUNDER TEAMS UP WITH POLYGON FOR WEB 3. Polygon blockchain and Alexis Ohanian’s Seven Seven Six venture capital business launched a $200 million fund to support social media and Web 3.0. Gaming app development projects.
Ohanian co-founded Reddit in 2005, and after leaving in 2010, returned for several years before stepping down in 2020. He has been a seed investor in prominent internet and blockchain companies including Coinbase and Instacart.
Polygon is a layer two blockchain network that runs decentralized apps over Ethereum with improved transaction times and other scaling benefits. Over 3,000 decentralized apps have been deployed on its network.
Sandeep Nailwal of Polygon commented on the joint venture, saying that through Web 3.0, he envisions platforms where “Users create the value, control the network and reap the rewards.”
MID-CAP MOVERS BUCK CRYPTO HOLIDAY HUMBUG. For those who thought they missed the boat on the largest cap cryptos, a confluence of factors is creating chances, via a Christmas crypto swoon.
Meanwhile, there were a few standout mid-cap projects bucking the general malaise, at least through the weekend.
Hedera (HBAR), a decentralized ledger that boasts associations with some leading tech companies and international banks experimenting with crypto innovations like Shinhan in South Korea, increased by 12.79 percent in a 24 hour period.
Arweave, a decentralized blockchain that promises “forever storage” of documents using Web3 tech, increased by 10.33 percent, and Decred and yearn.finance (YFI), two DeFi focused projects, by near double digits.
Metaverse Helps Fuel HBAR
The HBAR Foundation got on the Metaverse bandwagon with a new agreement with MetaVRse to assist the development of metaverse-related apps. HBAR was up almost 40% in the last week, as of the late weekend, though the token remains far off it’s late summer highs of 56 cents.
The fresh interest in HBAR was also sparked by the company’s Tweet regarding Google accepting crypto-currencies for Google Cloud, as well as the fact that it “also has agreements with Hedera and others.”
Hedera, which uses a unique patented “hash graph” system to store and verify info, is an enterprise-grade, proof-of-stake public network.
Its native token has witnessed a nearly sevenfold increase in price year to date. Though solid, other top 50 cryptos like Solana and Polygon have seen much steeper climbs in 2021.
Nonetheless, as Ambcrypto.com noted, HBAR had a network utilization of over 2K+ TPS on December 18th, demonstrating significant network usage activity on the blockchain.