2 October

Société Générale Applies for $20M MakerDAO Loan Using Bond Token Collateral

“In a proposal on Thursday on MakerDAO’s governance forums, French multinational banking giant Société Générale (SocGen) submitted an application for the decentralized finance (DeFi) lending platform to accept on-chain bond tokens issued by the bank as collateral for a stablecoin DAI loan.

The loan would be for up to $20 million in DAI – likely the largest step towards institutional adoption of DeFi to date. SocGen has been a leader in experimenting with blockchain assets for years, having issued bond-backed tokens on the Ethereum blockchain as far back as 2019.

In April, Maker made headlines by issuing a $38,000 loan to finance a real-world mortgage and has been exploring other real-world options in collaboration with Tinlake and Centrifuge.

This is the next logical step in MakerDAO’s mission to integrate the crypto and real-world economies. This collateral should be seen as step one of what is next to come. Integrating all publicly traded bonds and providing repo. Quite a huge market.

The tokens that SocGen has submitted for application as collateral were issued in 2020, have a fixed rate of 0%, and mature in 2025. They sport a AAA rating from rating agencies Moody’s and Fitch. Both the bond tokens and DAI are recognized under French law.”

Bitcoin Climbs Above $47K as Stocks Fall and Investors Eye Inflation

“Bitcoin is pushing higher despite classic risk-off action in traditional markets. The cryptocurrency’s resilience has raised investors’ hopes for a stellar rally in October. Reduced probability of a regulatory clampdown on crypto markets seems to be cushioning bitcoin from the instability of traditional markets.

October is a seasonally bullish period, and bitcoin’s recent stability amid stock market losses and China’s blanket ban on virtual currency businesses is reminiscent of the cryptocurrency’s resilience in the face of the negative news seen just before the beginning of the bull run from $10,000 in September and October 2020.

It remains to be seen if history will repeat itself. While rising inflation expectations across the globe and falling real or inflation-adjusted bond yields are supportive of a renewed bull run, the Fed’s impending taper – or scaling back – of stimulus may slow down the ascent.

Data released early today showed eurozone inflation rose 3.4% on an annual basis in September, hitting the highest reading since September 2008.”

Stablecoin Issuers Could Soon Face Bank-Like Regulations

“The reported recommendation is part of a Treasury-led presidential advisory group’s upcoming stablecoin report. First announced in July, the report is now expected to be released in late October.

A senior administration official confirmed to CoinDesk that the report is accurate and that the federal government is looking at two different pathways. The first is the congressional pathway outlined by the WSJ, though the official did not provide specifics. The second is through the Financial Stability Oversight Council (FSOC), a panel of regulators tasked with monitoring potential risks to the financial system.

In a floor speech on Wednesday, pro-crypto Sen. Cynthia Lummis (R-Wyo.) called for regular audits of stablecoin issuers and expressed concern with the lack of transparency of major issuers’ reserve backings.

A number of stablecoin issuers are in the process of, or have stated intentions to, obtain bank-like regulatory status. Circle said in August it wants to be a national crypto bank; Paxos, which issues USDP (formerly PAX) and BUSD in partnership with Binance, got a conditional banking charter in April.

Today’s news reports about the potential recommendations from the President’s Working Group on Financial Markets (PWG) is encouraging, as the time has come to address the risks and seize the significant opportunities of dollar digital currencies like USD Coin (USDC).”

Global CBDC Bridge Needs Public and Private Cooperation, says BIS

“The BIS’ latest CBDC report refers to joint efforts with the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the United States Federal Reserve, Sveriges Riksbank and the Swiss National Bank to explore a retail CBDC.

The central banks participating in the report agreed that any CBDC ecosystem would involve the public and private sectors in a balance to provide ‘desired policy outcomes and enable innovation that meets users’ evolving payment needs.’

A theme that cuts through almost every consideration is interoperability. Domestic interoperability would be key to ensuring a CBDC system coexists with other national payment systems and contributes to broader accessibility, resilience and diversity.”

DeFi Community Blasts Compound CEO for ‘Doxxed’ Comment

“Robert Leshner today tweeted asking that users who erroneously received large amounts of COMP tokens due to a bug return it to the Compound Timelock, or it would be ‘reported as income to the IRS, and most of you are doxxed.’

Perhaps unsurprisingly, the tone of Leshner’s tweet didn’t go down too well with the DeFi community.

Julien Bouteloup, a member of the core team at automated market maker Curve Finance, argued that Leshner’s comment ‘sounds like Compound has been gathering personal data about its users & willing to dox’ them all if they don’t return the fund earned at the casino.’ ‘Code is law. Unless we fuck up. Then we call the IRS on you,’ ironically noted Blockstream CSO Samson Mow.

Leshner later admitted that his comments about doxxing and the IRS were “a bone-headed tweet/approach” and he appreciates the community’s “ridicule and support.” Meanwhile, Compound Labs has published a new proposal to temporarily disable COMP rewards, although voting won’t start until tomorrow.”

El Salvador Mines First Bitcoin With Volcanic Energy

“Following the approval by El Salvador’s congress for the adoption of bitcoin as legal tender in June, Bukele said he had instructed state-owned geothermal electric company LaGeo to allow bitcoin miners to tap the country’s volcanic resources.

With 20 “potentially active” volcanoes, which account for almost 22% of the country’s energy supply, El Salvador’s harnessing of geothermal energy could provide an answer to the hunt for a reliable clean energy source to power bitcoin mining.

This is officially the first bitcoin mining the volcanode.”

The Disrupt

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