Polygon Gets Favor in the Stablecoins Front as Tron and Tether Perk Up Amid FUD Rattle
Published5 months ago
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Bermuda-based digital asset bank Jewel this week announced the Jewel USD (JUSD), a US dollar-backed (1:1 ratio) stablecoin that will be functional within the British island territory upon release. The yet-to-launch project will target institutional investors with the licensed digital bank looking to afford real-time settlement solutions to regional institutions. The stablecoin will release at a later unconfirmed date with wallets tailored for institutional clients, but there are plans to extend the service to cater to the commercial and retail niches.
Polygon blockchain to power Jewel Bank's upcoming ‘fully-backed' stablecoin
The stablecoins ecosystem will leverage the Polygon chain to facilitate transactions when it launches. Jewel's chairman Chance Barnett confirmed that Polygon would remain the ecosystem of choice for the future scope that envelops institutions, businesses, and individual users.In other news, TrueUSD on Thursday launched a stablecoin product (TCNH) backed by the offshore Chinese Yuan stablecoin on Tron's public blockchain. The TrueUSD team cited the growing demand for digital currencies in Asian financial markets, particularly Hong Kong, as a swaying factor adding that it has expectations of being at the forefront of digital currency infrastructure.
“Our partnership with Polygon helps power a key part of our long-term stablecoin infrastructure, which brings bank-grade safety, speed, and security to stablecoins,” the Jewel exec said in a statement.
To learn more about Polygon, visit our Investing in Polygon guide.
Justin Sun makes ploys for TRON amid ceasing FUD
FUD around centralized entities has characterized the last few days, more so Binance, the world's largest cryptocurrency exchange. The Cayman Islands-registered digital assets trading platform earlier this week recorded its single largest daily record in withdrawals – with up to 40,353 Bitcoin and 278,017 ETH withdrawn on Tuesday – as much as $1.9 billion in withdrawals for the 24-hour period between December 12 and 13. It didn't help that other crypto executives were pursuing Binance, but rightly so, over the firm's recent ‘Proof of Reserves' report. Kraken CEO Jesse Powell questioned the efficacy of the report, contending that it was flush with misinformation, not to forget that the Kraken co-founder considers Mazars, the auditing firm, not to be a ‘traditional Proof of Reserves firm.'
Shuffling the cards
Concerns around Binance's solvency since the start of this week and news that the Department of Justice was pondering on whether to move against the crypto exchange for violations threw a section of the market into a panic. The negative sentiment deepened following news of Justin Sun's money moves which only worked to intensify the FUD. The Tron co-founder has been moving stablecoins around, and as you'd expect a big money move, the same raised observers' eyes. It started with Justin Sun withdrawing 33.91 million BUSD, which he then transferred the Paxos – the sole BUSD issuer, and further swapped 15.43 million USDT for USDC. On the same day, he moved 100 million USDC from Circle and deposited it on Binance.
The exchange's CEO Changpeng Zhao would later confirm that though he wasn't sure of the particulars, the transaction involved an endeavour to bring Binance-native BUSD onto the Tron network. Sun withdrew the $100 million (this time in BUSD) just three hours after the USDC deposit. He then proceeded to wire the BUSD tokens to Paxos. He carried out a similar transaction on Wednesday, moving a further 100 million BUSD from Binance to the Paxos Treasury. Zhao found the FUD “thoroughly annoying,” conveying the same through his active Twitter account. Regardless, it will take some time before trust can be regained, especially with centralized entities in the aftermath of the FTX collapse. Tron's algorithmic stablecoin recently felt the heat of nearly being depegged as it strayed away from its 1:1 exchange rate with the USD briefly slipping to $0.97.
USDT issuer addresses WSJ report and reveals plans to phase out secured loans
Still within the sector, USDT issuer Tether on Dec 13 informed users that it would be halting secured loans starting next year. The firm indicated that this is a move to enhance trust and faith as it muddles through a blemished reputation, promising it would gradually stop leveraging money in its portfolio for profits. Swearing to stay off lending – a lucrative deal in crypto – Tether is doing its bit in combating the so-rampant FUD in the industry right now, being that it has been a victim in the past. In the Tuesday announcement, Tether addressed specific speculations, shooting down the idea that Tether, its reserves, or risk management is up to question. The stablecoin issuer has in the past said that its secured loans operate similarly to private banks but with the added benefit of being over 100% backed. This statement comes after the Wall Street Journal published an article alleging that these loans were risky and that Tether may not have enough assets to cover potential redemption.
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Sam is a financial content specialist with a keen interest in the blockchain space. He has worked with several firms and media outlets in the Finance and Cybersecurity fields.