Published: 2023/11/08

Updated: 2023/11/08

Author: Alex Matt

Doubts Over Stablecoins and El Salvador’s Lightning Network Upgrade”

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CasinoColada – the Stablecoin Doubts Continue

Our team at CasinoColada, always tries to stay on top with the latest trends in the crypto business. Today we are bringing you a recap of the day. If you want more analysis and news in the world of finance, crypto and football, stick with us!

The Bank for International Settlements (BIS) has cast a discerning eye on the reliability of stablecoins as a store of value, and its findings paint a less-than-stable picture. BIS, often referred to as the quintessential “bank for central banks,” released a report on November 8, stating that stablecoins have fallen significantly short of their “stable” label.

According to the comprehensive analysis by BIS, fiat-backed stablecoins managed to maintain their peg to the underlying asset only 94% of the time. In the world of crypto-backed and commodity-backed stablecoins, the situation was even more precarious, with peg ratios of 77% and 50%, respectively.

BIS has voiced apprehension over the dearth of data regarding the users and utility of stablecoins, a key concern stemming from the cryptocurrency’s enigmatic nature. This paucity of information makes it arduous for regulators to gauge the risks that stablecoins may pose to payment systems and financial stability. Consequently, it may impede authorities’ ability to craft and enforce effective policies and safeguards. Meanwhile, for the best crypto casinos of October 2023, make sure you stick with us!

The stablecoin market has seen exponential growth over the past four years, with leading players such as Tether (USDT) and Circle’s USD Coin (USDC) solidifying their dominance. However, BIS’s findings cast a shadow of doubt on the veracity of these assets’ stability claims.

El Salvador’s Bitcoin ATM network is poised for a transformative upgrade with the forthcoming integration of the Lightning Network, a layer-2 scaling solution for Bitcoin. Athena Bitcoin, the company operating a state-owned chain of crypto ATMs in the country, has ambitious plans to introduce the Lightning Network into 100 machines by December 2023.

Athena Bitcoin Global and Genesis Coin have already taken strides to incorporate Lightning Network technology into their infrastructure, starting with El Salvador and subsequently extending across Latin America. Among the 215 operational crypto ATMs in El Salvador, the remaining Chivo-branded kiosks and Athena-branded machines are scheduled to receive the Lightning Network upgrade in Q1 2024.

This development aligns harmoniously with the vision of El Salvador’s leader, Nayib Bukele, who boldly made Bitcoin (BTC) legal tender in the country in 2021. Bukele’s recent announcement of his re-election bid for the presidential office in 2024 underscores his steadfast commitment to crypto-friendly policies, a stance that has significantly altered the nation’s financial landscape.


CasinoColada – Crypto Conclusions

In a separate and rather contentious development, Wintermute’s CEO, Evgeny Gaevoy, has publicly accused the NEAR Protocol and Aurora of a breach of contract regarding an $11 million stablecoin swap. Gaevoy contends that NEAR and Aurora reneged on their agreement to swap $11.2 million worth of USN stablecoins for Tether (USDT), a cryptocurrency Wintermute was in the process of liquidating for FTX, a major cryptocurrency exchange.

Wintermute’s submission for redemption was met with an unanticipated refusal by NEAR, who allegedly declined to fulfill their commitment and instead offered a mere 20% of the $11 million. Frustration mounts as Wintermute continues to await the much-anticipated USDT.

Gaevoy’s social media post carries a note of finality, as he alluded to potential legal action against NEAR and Aurora. This Twitter statement serves as a public and definitive attempt to implore the NEAR Foundation to honor the original redemption agreement.

At the time of reporting, the NEAR Foundation and Aurora had not issued a response to the allegations, further heightening the intrigue surrounding this stablecoin dispute. For more news, check out our other pages!

The Author

The Author

Alex Matt


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