Daily Digest - 1 February 2023

Headlines

▌Cardano ecological stable currency Djed has been launched on the mainnet

On January 31, Cardano’s first decentralized stablecoin, Djed, has been launched on the mainnet. The price of Djed is anchored to the US dollar and supported by the surplus of Cardano’s native cryptocurrency ADA. It was previously reported that after the launch of Djed, Cardano users will be able to use Cardano’s native Token ADA as collateral to mint Stablecoins. Stablecoins are designed to be over-collateralized, and each Djed requires more than 400% of the collateral value to be minted.

Policy

▌UK Treasury releases plans to regulate crypto trading platforms and lenders

The British Treasury has released a consultation paper that outlines plans to regulate cryptocurrency trading platforms and lenders as part of its financial services roadmap. The consultation, which will be open for comment until April 30, aims to "bring confidence and clarity to consumers and businesses alike," Treasury said in a release. It added that this approach hopes to mitigate the worst risks of volatility and structural vulnerabilities that have plagued some of the industry's business models, bringing it in line with traditional finance. “We remain firmly committed to growing the economy and enabling technological change and innovation, including cryptoasset technology,” said Andrew Griffith, the U.K. Treasury’s economics secretary, in a press release. So far, the U.K. has taken tentative steps to regulate cryptocurrencies. The Financial Services and Markets Bill, which was first tabled in Parliament by then finance minister Nadhim Zahawi in July, includes regulation of stablecoins and so-called “digital settlement assets.”

Cryptocurrency

▌Hong Kong Monetary Authority: Stablecoins that gain value based on arbitrage or algorithms will not be accepted

Among the main principles of the upcoming regulatory framework, the Hong Kong Monetary Authority (HKMA) may not support algorithmic stablecoins, but will require all stablecoin issuers to always back their value with underlying reserve assets. It is reported that the importance of full support and redemption of stablecoins at face value is emphasized in the key regulatory principles, which mentions: "Stablecoins that obtain value based on arbitrage or algorithms will not be accepted, stablecoin holders should be able to convert the stablecoin to the reference fiat currency at face value within a reasonable period of time.”

▌HSBC is hiring a digital asset product manager to drive cryptocurrency strategy

Jinse Finance reported that HSBC released recruitment information and specially hired a product director to be responsible for tokenization use cases and digital assets. According to the job description, the candidate will play an external role "representing the firm to regulators, clients and the digital asset ecosystem", positioning HSBC as a "leader and innovator driving digital asset strategies". Simultaneously, successful candidates for digital asset product managers will be responsible for driving the cryptocurrency strategy. Currently, HSBC is offering cryptocurrency products along with other well-known banking giants such as JP Morgan. However, as HSBC looks to tokenize, the bank may look to offer a wider range of services.

▌XRP Lawyer Scores Crucial Victory For Ripple And Crypto

Even though the legal battle between Ripple and the U.S. Securities and Exchange Commission was not heard yesterday, Ripple, XRP, and the entire crypto industry won an important partial victory in its fight against the SEC’s overreaching regulation by enforcement, thanks to attorney John E. Deaton. In yesterday’s appeal hearing, the SEC sought an affirmation from the New Hampshire district court judge issuing a broad, vague injunction against the sale of the LBRY token, in which the token itself becomes a security, bringing secondary market sales under the SEC’s jurisdiction.