The realm of cryptocurrency is expanding with DeFi, but stablecoins (and digital FIAT) are starting to threaten the principles and on-boarding of cryptocurrencies altogether.
Recently, USDC issuer CENTRE called on a blacklist function to restrict the account of activities of the associated Ethereum address. This goes against the principles of censorship resistance and cryptocurrencies altogether.
Nevertheless, Dovey Wan, crypto analyst and partner at Primitive Crypto is not surprised. She notes that almost all stablecoins have built-in functions to restrict or limit account operations. She tweeted,
Not sure why ppl are upset abt the USDC/USDT blacklisted news .. 🤷🏻♀️ the code is baked in for blacklisting from day one .. It’s fiat coin on steroid guys
Just like Libra ♎️ other fiat coins are NOT fungible and can be censored as well –
USDT (ERC20) has addBlacklist and destroyBlackFunds
USDC has blacklist to limit transfers
PAX has lawEnforcementRole and wipeFrozenAddress
THESE ARE NOT TRUE CRYPTOCURRENCIES SORRY 😐
— Dovey 以德服人 Wan 🪐🦖 (@DoveyWan) June 22, 2019
In recent years, developers have had a similar concern around the public addresses of Bitcoin which makes the protocol non-fungible and not privacy protected. Nevertheless, it still cannot limit a transfer by code, it will go through with the authenticate private address.
The Digital Currency
The growth of the Chinese CBDC, the “DC/EP” (digital currency/electronic payment) led by the People’s Bank of China (PBoC) has made it imperative for the U.S. to progress with it as well. Mati Greenspan, financial analyst and founder of Quantum Economics tweeted,
“Now, the question is not if the US will pursue a CBDC, but how.”
Crypto Dad Chris Giancarlo, former chairman of the CFTC and US attorney, Fidelity’s Tom Jessop, Forbes contributor Jason Brett, Greenspan and others will be joining a webinar on the Digital Dollar Project. Greenspan further adds in his newsletter that,
The idea that the almighty dollar will finally be converted into a native digital asset is tantalizing. However, he added, “this may or may not increase the usage of bitcoin or other cryptocurrencies…”
Hence, the crypto onboarding with the growth of CBDC still comes is in a grey area. Moreover, so far the Chinese story has been concentrated by the Governments efforts only, as it keeps crypto in the dark with its native Blockchain network.
The USDT Dominance Threat
Furthermore, the leading stablecoin in the market, USDT, continues to stay under the radar of the US justice system as the New York Attorney General stands by his accusations. Julien Bouteloup, an entrepreneur and CEO at Stake Capital tweeted,
This is a critical issue given the trading volume on exchanges rely heavily on USDT. As reported earlier on CoinGape today, the Supreme Court has withheld New York’s case against Bitfinex’s USDT reserve claims. In early 2019, this came one of the biggest concerns for the crypto markets, and its’ scale has only grown larger since then.
How do you think the US digital dollar scene will affect the crypto industry? Please share your views with us.