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Istanbul was updated in Ethereum network. SEC moderates its position regarding cryptocurrency companies. Tether's USDT stablecoins hit record highs.
Ethereum Istanbul hard fork deferred in the summer of 2019 was held early in the morning, December 8. According to the developers team, blockchain was updated without any technical difficulties. Three days before the procedure, the developers suggested all users to update the software to the latest version. If users would ignore this warning, they might have certain problems. In particular, there is a likelihood of confusion and even double spending.
The reason for the summer transfer of Istanbul hard fork was the unwillingness of the Parity client development team to introduce all updates into it. This was done at the last moment, therefore, there are some risks of crisis situations. However, within two days after the update was launched, there were no reports of mass user complaints.
Istanbul is the last hard fork before switching to Ethereum 2.0 protocol. Six EIPs were instilled in it, which are designed to improve protection against DDos attacks, increase compatibility with other cryptocurrencies and reduce gas costs. It is still unknown when exactly blockchain will switch to new standards. Their main goal is the introduction of PoS protocol, which will significantly reduce the resource consumption of operations and upgrade the virtual machine.
Another developers’ task is to address the issue of scalability. They are confident that network bandwidth will increase 1,000 times. Eight teams are working on the project, facing global goals. Moreover, there is a possibility that two independent blockchains will be supported after Ethereum 2.0 launch. There is currently no final concept. However, a special time pressure wasn’t also noticed. After a successful Istanbul hard fork, there are no immediate threats to the network that require intervention.
Too harsh pressure from the US Securities and Exchange Commission has caused some discontent in the financial community. It is difficult to say how much this led to SEC's position liberalization, but the experts noticed certain progress. As a result, the work of the whole two cryptocurrency funds was approved.
SEC's tough stance on the cryptocurrency market has led to the risk of some investors transferring to another jurisdiction. Many countries agreed to launch Bitcoin ETF funds, and the investors got the opportunity to buy digital financial assets and keep funds in them. According to a survey by Charles Schwab brokerage company, millennials trust Bitcoin more than shares Microsoft, Walt Disney and Netflix stocks.
As a result, the New York Digital Investment Group (NYDIG) and Stone Ridge received permission to launch cryptocurrency funds for institutional investors. However, Bitcoin will not be available to the buyers. They will be able to buy and sell only the securities nominated in it. Risk hedge funds themselves will be able to acquire futures contracts on the CME Chicago Mercantile Exchange. Hester Peirce, the SEC Commissioner, which is considered to be cryptocurrency enthusiast, said that such a decision is quite progressive.
At the same time Jay Clayton, the Head of the Commission, is confident that his department is taking a balanced approach. In his speech to senators, he recognized the great potential of distributed ledger technology. J. Clayton said that SEC's task in the cryptocurrency market is to protect investors’ interests while stimulating the development of financial institutions.
It is worth noting that the department appeared to be in a difficult situation. On the one hand, many countries are considering introducing state tokens. At the same time, the United States is forced to fight for the hegemony of the dollar as a global reserve asset. While financiers criticize the authorities for being too cautious, the senators last week called for stricter cryptocurrency turnover rules.
Tether USDT stablecoin created in 2015 reached capitalization of $ 4.7 billion. This suggests that more than 500 million coins have been issued over the past three months. In addition, the Tether portfolio contains 40 million coins in EUR and $ 216 in RMB. The closest competitor, the USDC token by Coinbase and Circle, also showed significant growth. Its capitalization rose to $ 500 million.
Stablecoin is actively used for trading operations on blockchain and cryptocurrency exchanges. The coin value is strongly tied to fiat money and allows storing funds in assets with a stable rate during periods of markets decline. In some situations, for 1 USDT, buyers were ready to give more than 1 dollar. Using Tether stablecoin allows to significantly save on transactions, since there is no need to convert digital financial assets into fiat money.
Initially, Tether launched a stablecoin on the blockchain of Omni bitcoin network, but later it used Tron, EOS and Liquid for this purpose. However, most of coins are on Ethereum platform. Funds totaling $ 2.2 billion are concentrated there.
According to official information, more than 70% of Tether stablecoins are backed with real dollars on bank accounts. The remaining amount is secured by debt obligations of related companies. In any case, coins stability is not in doubt among investors. The issuer was repeatedly criticized and the US prosecutor's office conducted an investigation against it in the spring of 2019. As a result, law enforcement officers did not reveal significant violations of the applicable law.