Rice-based stable coin is being launched in Indonesia

Rice-based stable coin is being launched in Indonesia

Benzinga

Recall last month, when users of Reddit’s popular WallStreetBets forum caused shares of GameStop Corp. (NYSE: GME) to spike by creating a massive short squeeze on the stock. The group also targeted AMC Entertainment Holdings Inc (NYSE: AMC). This forced short sellers to buy more in order to forestall massive losses, sending the stock price on a meteoric rise. Well, last week, their sights were set on cannabis. Swaggy Stocks — a website that tracks ticker sentiment on WallStreetBets — noticed Sundial Growers Inc (NASDAQ: SNDL), Tilray Inc. (NASDAQ: TLRY) and Aphria Inc. (NASDAQ: APHA) went along for the ride: Sundial jumped 79% on Wednesday Tilray spiked 51% Aphria grew 11%. This was short lived. By Thursday, Tilary fell 50%, Aphria dipped 36% and Sundial closed down 19%. On Friday, Tilray shares closed down 9.83%, while Sundial closed down 12.61%. Aphria was up slightly by 0.36%. View more earnings on ACB Benzinga Cannabis content is now available in Spanish on El Planteo. 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How Mastercard’s crypto strategy is distinct from its new stablecoin plans

The crypto space lit up late Wednesday when news broke that Mastercard was expanding the scope of its digital currency support.

Mastercard said in a blog post that it was moving to enable its systems to facilitate payments in the form of stablecoins directly to merchants who choose to accept them. Such a service will complement Mastercard’s existing crypto card-focused offerings, through which consumers can spend their cryptocurrencies via an issuer’s card – though in the end, the transaction is settled outside of Mastercard and in the form of fiat currency like the U.S. dollar.

The payments firm’s chief financial officer, Sachin Mehra, discussed the expanded offerings during a virtual event hosted by Goldman Sachs on Wednesday, according to a published transcript obtained by The Block. But more broadly – and, perhaps, more importantly – Mehra provided a clear-cut break down of how Mastercard views what he termed “sub-categories” of digital currencies: cryptocurrencies, fiat-backed stablecoins and central bank digital currencies, or CBDCs.

Mehra called crypto “an asset class,” adding: “It’s not a payment vehicle as far as we’re concerned.” He spoke about Mastercard’s crypto card program and indicated that such efforts would continue and grow over time. “We’re seeing tremendous growth in that space,” said Mehra, saying later:

“So that’s kind of – and we’ve got numerous agreements in that regard, which are already in play. And we’ll continue to do more and more of those because people want to be able to use that asset class to make payments at the point of sale.”

On the subject of stablecoins, Mehra noted that “we have plans to enable those, regulation pending, across our network.”

Mehra continued:

“So in other words, the delivery of those stablecoins and to allow the settlement of those stablecoins with those merchants who wish to be settling in those stablecoins on a forward-going basis. So we are enabling our network to allow for that to happen yet this year.”

Lastly, Mehra discussed Mastercard’s work in the area of CBDCs, which is perhaps a bit more theoretical given that such currencies remain in their nascent stage. Yet payments firms big and small appear to be positioning themselves as possible service providers should they take off – PayPal being one of those, according to statements from the firm’s leadership – and it seems that Mastercard is no exception.

“We can bring the technology,” said Mehra. “We have – we’re the leader – one of the leaders in terms of the patents we have developed in terms of DLT. And how we can help [central banks] at the infrastructure level and/or the application and services level is something we remain engaged with on numerous [fronts] with several central banks.”

Mehra concluded his remarks by calling the broader crypto sphere “a space to keep an eye on.”

“I think it will ebb and flow depending on what the flavor of the day is as it relates to cryptos. We’ve seen run-ups in crypto prices in the past. But broadly speaking, the use of digital ledger technology is something we will remain focused on.”

One potential conclusion from Mehra’s comments is that whereas Mastercard is interested in capturing value around the interest in cryptocurrencies, the payments firm views stablecoins as worth the investments required to integrate them into its systems. And as for CBDCs, those remain on the horizon – albeit one that might one day constitute an entirely new business line.

Credit Card Companies Should Offer Stablecoin Payments or Be Left Behind: Gartner

Centralized payment companies such as Visa, Mastercard and PayPal will need to adapt if they are to survive the potential demand for blockchain-based stablecoin payments, according to research firm Gartner.

In a Thursday blog post, Gartner notes that, while new bitcoin (BTC) offerings from such firms are helping to prepare the transition to a future payment infrastructure, their revenue is based on charging transaction fees for clearing and settlement.

The fee strategy, which sit at odds with blockchain’s peer-to-peer model, could be the very thing that sees these firms fall behind the competition from stablecoin payment networks, per the post penned by Avivah Litan, distinguished VP analyst at Gartner.

Litan described such firms as “centralized decentralized finance” (CeDeFi) – in which centralized, mainstream firms with big bitcoin holdings bring innovation to the DeFi space and, conversely, adopt DeFi’s biggest apps.

But Litan points out that customers of these types of services are likely wondering if they will be obliged to pay centralized service fees for moving their cryptocurrency along the blockchain in the near future, defeating the technology’s initial promise.

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“Companies we speak to are justifiably skeptical of these services,” Litan wrote. “After all, the revolution of blockchain payments is that they execute peer-to-peer and eliminate central intermediaries and associated bank fees.”

However, the author added Gartner has yet to see a range of offerings from the crypto space for viable stablecoin payments, pointing to a lack of easily accessible applications and fees lower than are currently on offer from card networks or firms like Square and PayPal.

Litan said there’s potential for card firms to provide a range of as-yet-unseen offerings, such as transparent real-time stablecoin payments on the blockchain tied to underlying information regarding a given transaction, and protections for funds backing stablecoin sitting in partner bank accounts.

Card companies could provide the gateways for payors and payees and add functionality, according to the post.

“The card brands could still earn revenues from on and off ramp value-added services, and from interest on the reserves underlying the stablecoins,” Litan said.

By 2022, CeDeFi could be ready for enterprise adoption if the regulatory guidance is present, the research analyst predicted.

But, should the legacy payment companies fail to keep pace with the likes of fiat on/off ramps, such as fast-moving cryptocurrency exchanges like Binance and Gemini, other firms are going to step forward.