• The U.S. government is currently backing the USDC stablecoin, with Circle keeping around a quarter of USDC’s reserve assets at about six banks.
• Circle CEO Jeremy Allaire discussed emergency measures taken and game theorizing for secure deposits.
• BitMEX co-founder Arthur Hayes has proposed NakaDollar (NUSD), a stablecoin backed by bitcoin and derivatives that could be deeply liquid and attractive to traders.
Banking Crisis Spurs Stablecoin Experimentation
The banking crisis has provided a unique opportunity for experimentation within the world of stablecoins. The U.S. Treasury Department, Federal Reserve, and FDIC have all announced plans to backstop all deposits at two failed banks in order to secure 8% of the collateral for the USDC stablecoin – an initiative led by Circle, which keeps around a quarter of USDC’s reserve assets at about six banks worldwide. Meanwhile, BitMEX co-founder Arthur Hayes has proposed NakaDollar (NUSD), a stablecoin backed by bitcoin (BTC) and derivatives – an idea which could revolutionize how crypto exchanges handle liquidity and provide stability if accepted and used by investors.
Circle’s Emergency Measures & Game Theorizing
Circle CEO Jeremy Allaire spoke about some of the emergency measures his company took amid the banking crisis as well as serious game theorizing Circle has played over the past two years to spread out its cash reserves in order to eventually create “straight-through government obligation money.” As Allaire explained on the “Bankless” episode: “We moved very quickly…we started moving funds out of certain institutions into other institutions…we were attempting to diversify where our reserves were held.” This effort was part of their larger goal to eventually achieve trustless financial infrastructure through blockchain technology that is completely secure from any external forces or failures in traditional banking systems.
BitMEX co-founder Arthur Hayes recently proposed NakaDollar (NUSD), a revolutionary new kind of stablecoin backed by both Bitcoin (BTC) and Bitcoin derivatives – an idea which could potentially become deeply liquid and attractive to traders if accepted and used by investors across different crypto exchanges worldwide. According to “The Hash” panel discussion about this proposal, there is still much more work that needs to be done before it can become reality – but it does open up interesting pathways for exploring alternative models for collateralizing stablecoins in uncertain times like these when traditional banking systems are failing us left and right .
Stablecoin Market Outlook
Although there are still many unknowns surrounding this ever-evolving world of digital money, one thing is certain: we are witnessing unprecedented experimentation with regards to how we use cryptocurrency as collateralized money – particularly during times like these when traditional banking systems are in turmoil due to government bailouts or other unforeseen events such as natural disasters or pandemics like COVID-19. It will be interesting to see what kinds of innovations arise from these experiments over time, especially since they have already paved way for some exciting possibilities such as BitMEX’s NakaDollar proposal .
To conclude, while there may be many unknowns regarding digital money moving forward due to ongoing experimentation within this space, it’s clear that we live in exciting times where innovative solutions such as BitMEX’s NakaDollar proposal can help us explore alternative models for collateralizing stablecoins even during turbulent times caused by economic downturns or crises – ultimately paving way towards greater financial security in future generations through blockchain technology .