Digital Euro Association Blog

Stablecoin and CBDC News Digest, July 2022

The world of digital money moves quickly and is time consuming to keep up to date with. To keep you up to speed with the most important pieces of news that have lasting implications especially for stablecoins and CBDCs, the monthly Stablecoin and CBDC News Digest takes care of it for you.

What happened in the stablecoin space?
Circle’s transparency report on the backing of USDC.

Circle published its first monthly breakdown of USDC reserve assets in mid July. Circle currently holds $55.7 billion assets on its books to back the USDC. As of July 2022, there is $55.56 billion worth in USDC in circulation, demonstrating the stablecoin’s full backing and peg to the US Dollar ( in July 2022). The backing consists of short-term U.S. government bonds ($42.12 billion) and U.S. dollar cash reserves ($13.58 billion). In the medium-term, Circle’s goal is to publish daily transparency reports on the USDC backing.

Tether launched British Pound stablecoin.

At the end of July, Tether is launching a new British pound denominated stablecoin called "GBPT". Tether’s fourth stablecoin GBPT will be audited by KPMG  to provide monthly attestations proving its reserves. Earlier this year, the UK Treasury expressed the goal to make the UK a global crypto hub and the UK government wants to recognize stablecoins as a valid form of payment, going hand in hand with GBPT’s issuance timing.

Central Bank of Russia expresses opposition to stablecoins.

A representative of the Central Bank of Russia (CBR) voiced opposition to stablecoins as a reaction to a statement by a top finance ministry official who suggested that his department would support the development of Russian stablecoins. The CBR sees the digital ruble as the only technological payment option whereas the country's Ministry of Finance is more inclined to accept the launch of stablecoins.

The concept of inflation adjusted stablecoins.

The harmonized index of consumer prices in the EU was at 8,6% in June 202. In an effort to lighten such inflationary pressures on stablecoins a new emerging algorithmic stablecoin tier is forming. The price of the stablecoin is not pegged to any existing currency but is stable with regard to the consumer price index (CPI) measuring real value of a currency in an economy based on consumption of goods and services. The algorithm tracks the rate of inflation and makes automatic adjustments to DeFi yields based on on-chain inflation data sources from oracles. These oracles make use of several independent and transparent data sources to avoid having a single source of truth.

What happened in digital money?

Agreement reached on European crypto-assets regulation (MiCA).

The Council Presidency and the European Parliament reached a provisional agreement on the markets in crypto-assets (MiCA) proposal which covers issuers of unbacked crypto-assets, stablecoins, as well as the trading venues and the wallets where crypto-assets are held. This regulatory framework is key to protecting investors and preserving financial stability, while allowing innovation and fostering the attractiveness of the crypto-asset sector. This will bring more clarity in the European Union since some member states already have national legislation for crypto-assets, but so far there has been no specific regulatory framework at EU level.

Key topics in the framework include: 

  • Purpose is to regulate the risks related to crypto-assets
  • Develop a strong framework to protect consumers
  • EU-wide rules for crypto-asset service providers and different crypto assets

The provisional agreement is subject to approval by the Council and the European Parliament before going through the formal adoption procedure.

Central African Republic launches sango coin.

The Central African republic’s "Sango Coin", described as a "national digital currency" went on sale with a minimum investment of $100, $400 less than its planned minimum of $500. The government has said its digital coin project is aiming to raise almost $1 billion over the next year from the sale of its Sango Coin. Foreign investors will be able to buy citizenship for $60,000 worth of crypto, with the equivalent Sango Coins held as collateral for five years, and "e-residency" for a tenth of citizenship price, with Sangocoin held for three years.

The Euro fell toward parity with the US dollar.

The euro hit parity with the dollar, falling to its lowest level in 20 years and even dipping just below a one-to-one exchange rate with the U.S. currency at times in July. The euro has not been valued below $1 since July 15, 2002. Due to the emergence of non-USD denominated stablecoins, significant foreign exchange has been creeping into digital-asset markets. The euro’s decline has put pressure on the budding euro-denominated stablecoins market such as Stasis Euro and Celo Euro, with investors moving into USD stablecoins as a result of the euro's depreciation.

Bridge between blockchain and euro.

German authorities have developed technology allowing investors to buy and sell securities on a blockchain in return for central bank money, bridging a gap between two worlds that once seemed irreconcilable. The Bundesbank, said its solution was the first allowing those who sell securities on the blockchain to receive their proceeds in their account at the central bank. During the test, a government bond was issued on a blockchain and traded by Barclays, Citibank, Commerzbank, DZ Bank, Goldman Sachs and Société Générale. The trades were settled on the blockchain with the help of a “trigger chain” that connects the assets on the distributed ledger with the euro zone’s payment system, Target 2. This case study is an important step toward interoperability of the centralized and decentralized worlds.

No Comments Yet

Let us know what you think