Crypto exchange Bitso, one of the largest exchanges in Latin America, along with Circle, the USDC issuer, works on a system of trans-border transactions between Mexico and the USA.

The goal of the project is to create conditions for a convenient and swift money exchange between companies and individuals of the USA and Mexico. These transactions are supposed to deal with a number of the problems that exist now, which are: limits for transactions, high operation costs, and delays, which are characteristic of the banking system.


The new instrument, named Bitso Shift, uses crypto to operate cheap and swift trans-border payments that are available 24/7 and help people exchange Mexican pesos to USD Coin stablecoins that are supported by the US Dollar. According to their press release, payment transactions with Bitso Shift are performed within 24-48 hours. All transactions are operated by fully regulated financial institutions.


According to the World Bank, in 2020, the volume of transactions between the USA and Mexico grew by almost 10% and reached nearly 43 billion USD. There are many Mexican ex-pats in the USA who regularly send money back home. However, many country residents have no access to USD accounts.


And since the trans-border exchange between the USA and Mexico is believed to be the world's largest exchange corridor, the Circle and USDC see it as a great opportunity; Jeremy Allaire, the Circle CEO, agreed to that saying: "We are happy to join the Bitso Shift initiative that demonstrates that the blockchain technology can lead the world to high-scale, effective and profitable solutions."


As you see, cryptocurrencies can help people solve their problems quickly and effectively, the problems that were there for decades and couldn't change because of the complexity and monstrosity of the standard financial system. What do you think, dear forum users, would you like to use quick and cheap transactions with stablecoins?

We have already talked about such problems as inflationary pressure and the lack of elasticity in money supply at crisis. What else might be the cause of the huge inflation that we are living with right now?

Problem 3: centralized issuer

Many fiat and even some digital currencies have one centre where it is decided to issue more of that currency or not. For instance, for fiat money it would be the government, while for cryptocurrencies such as Tether it would be their founder and owner, Tether Ltd.

In other words, it is not such automated mechanism that decides how much money should be issued, but a person or a group of people with all the flaws that human brains have to offer. Instead of adjusting the size of money supply to the volume of goods and services in the economy, they continuously expand the money supply in order to lend money to the economy and thus push it forward.

Also, one more thing that a centralized issuer almost always fails to do is to provide a considerate reserve of the currency and monitor the quality of these reserves’ structure.
The solution we have come up with is to introduce the economy to decentralized money emission mechanisms, like the ones that blockchain has to offer. Then we all can go through a transition to digital money that has a transparent protocol.

Problem 4: not enough liquid reserve

As we have already mentioned above, centralized issuers often fail to save up enough reserve that could be easily transformed into valuable resources.
Throughout centuries, money was made of precious metals that were the reserve itself. Later, with the introduction of paper money, the government was the one responsible to provide enough resources, such as gold, to reserve and balance the system.

However, after the Bretton Woods Conference in 1944, gold has been losing its points as the major reserve for the whole monetary system. Then finally, in 1971, the USA declared that its money was no longer tied down to the golden standard, and then the economy stepped into a completely new era. We can even say that the money of today is not backed up by anything, it is pure air and ideas in people’s minds. The only thing that matters is how reliable is the country that issued some currency.

What can be done here? Every emission of money has to be protected by a reserve of an equivalent liquid asset. Whenever the money supply is decreased and the excess money is destructed, the reserve has to be returned to the issuer.

These are the problems we see in the modern monetary politics and the way we could deal with them. What do you think about it? Do you believe it is possible to create such non-inflationary money?

Problem 1: Inflationary Pressure

As we all know, inflation consists of two parts: Supply push and Demand pull. Altogether, it means that the money supply is in imbalance, and so is the amount of goods and services circulating in the economy.

But there is a solution! If someone develops an automated mechanism that would monitor the current volume of the market for all goods and services. Then more money should be issued only when there is an increase in the volume of the real market.

Problem 2: Lack of elasticity in money supply during an economic crisis

Economy does not grow all the time, and we in 2008, and then 2020 witnessed how easily it can reduce by a significant degree. What do governments do in such cases? They issue even more money to “support” the economy, while what should be done is absolutely opposite.

How is it possible to reduce the money supply once the economy is losing its power? The solution is simple: develop a physical mechanism that would destroy excess money supply and return a proportional share of a reserve that supports the money market.

And you, dear forum users, have you ever thought about such opportunities in this economy? Do you think that it is possible to overcome inflation with these solutions? We are waiting for your reply!

At the recently held Money 20/20 conference, chairwoman of the Federal Deposit Insurance Corporation (FDIC) Elena McWilliams said that state regulators have begun to develop standards for interaction between banks and the crypto industry. One of the key tasks of the project is to create conditions for the development of innovative technologies and risk management.

According to McWilliams, the spontaneous existence of the crypto-industry without clear regulation can have a negative impact on the development of the innovative field itself and deprive America of leadership in digital technology development.

Currently, the FDIC, the Fed and the Office of the Comptroller of the Currency at the U.S. Treasury are deciding what role banks will play in operations involving cryptocurrencies. According to the FDIC chairman, the regulators will present a series of related policy statements in the coming months.

Stablecoins received special attention at the conference. Once again, the need to regulate tokens on such points as asset security and financial stability of issuers, as well as strengthening anti-money laundering measures, was emphasized.

The standards under development will regulate the storage of cryptocurrency to secure trade transactions, its use as collateral for loans and even the opening of accounts along with fiat currencies. It also became known that the FDIC is considering the possibility of direct deposit insurance in banks issuing stabelcoins.

It seems that American regulators have seriously decided to take the cryptocurrency industry under full control, which actually contradicts the very idea of digital currencies. Do you think this will lead to the decline of the crypto market or will regulators be unable to cope with the scale of a decentralized financial system?

As it became known USDC issuer launched the stablecoin on Hedera Hashgraph blockchain. For Hedera Hashgraph, it is the first stablecoin.
According to the company's representatives, this is an important step towards simplifying the development of DeFi applications.

Hedera Hashgraph uses directed acyclic graphs (DAG) without grouping transactions in blocks. This technology enables it to reach high capacity (up to 10'000 TPS), low delays, and high energy efficiency.

Last month the Hedera board approved a plan to invest 10,7 bln HBAR tokens (around 3,85 bln USD) into the development of the ecosystem. HBAR Foundation will distribute grants between developers, startups and other projects that work on implementing Hedera network in DeFi, NFT, CBDC, gaming, and other industries.

The board includes 23 companies, including Boeing, Google, LG Group, Nomura Holdings, Deutsche Telekom, Tata Communications, London School of Economics and Political Sciences, etc.

According to Shayne Higdon, the Head of HBAR Foundation, the support from USDC will open such opportunities to the network participants as securitization and supply chain tracking platforms.

So now Hedera Hashgraph is the sixth blockchain in USDC family. The stablecoin also works on Ethereum, Algorand, Stellar, Solana, and Tron. They are planning to launch the token on Avalanche, Celo, Flow, Kava, Nervos, Polkadot, Stacks, and Tezos.

Looks like people see great potential in USDC for applying it in different areas of the digital business. We were wondering, dear forum users, do you think such investment projects are rational?

In its recent report, International Monetary Fund attacked cryptocurrencies in general and stablecoins in particular. According to the Fund representatives, stablecoins are not reliable enough to become a part of the international financial system. Among the vulnerabilities of stablecoins they listed non-transparent emission and distribution, risk of breakthroughs, instability due to high volatility.

IMF analysts called the regulators of developing countries down to prevent losing control over cryptocurrencies - it could be facilitated with the lack of the legal framework. The report outlines that cryptocurrencies and stablecoins may bear serious danger to unstable economies.

IMF calls the international financial community to introduce global standards for crypto assets, which, according to experts, may prevent 'infection' of other markets.

"As the capitalisation of the crypto market grows, the importance of these risks to macroeconomics may grow as well", so commented the specialists.

Recently, IMF has been calling to strengthen regulation of the crypto industry more and more often. It may be a reaction to such events as legalisation of Bitcoin in Salvador, the introduction of free conversion of USDC to USD in the MoneyGram platform, and other signs of popularisation of cryptocurrencies.

We believe that the regulators may have some ground for being worried since they risk losing control over both the shadow economy and the population's finances, should people switch to cryptocurrencies more. What do you think, is this scenario really threatening or will the cryptocurrencies remain a by-product of the financial world?

Bloomberg Press investigated the reserves of Tether stablecoin, and the results shocked the financial industry. Among others, USDT turned out to be tied down to such assets as short-term loans for large companies from China and loans for crypto-loan platforms like Celcius Network, and others.


The high attention of the US financial regulators to USDT tokens is no coincidence.  The stablecoin emission reaches 69 billion USD, with 49 billion tokens issued only this year. Such volumes could place the token issuer, Tether Limited, among the 50 largest banks in the USA, but the lack of transparency makes it an unpredictable and dangerous structure.


There were many accusations towards Tether Limited: lack of supply with USD, scarce information about the company leaders, giving out loans with a high risk of default. In media, Tether issuer is called 'an offshore hedge fund with a high risk level' and a potential fault of a crash of the whole crypto economy.


Meanwhile, Tether Limited continues rejecting all accusations and calls the Bloomberg research a compilation of unconfirmed speculations and an attempt to undermine their leading position.


A report by an audit company Moore Cayman on July 30th, 2021, confirms that USDT is fully supported by Tether Holdings Limited reserves that include: commercial securities amounting to 30,8 billion USD (49%), fiat and bank deposits that can be returned within 2 days and less - around 6,28 billion USD, or 10%, and US tax anticipation bills with a maturity less than 90 days and amounting to 15,3 billion USD (22,5%).


As Joe Biden's Administration has a project to include stablecoin issuers into the same legal framework as banks, Tether Limited with its full transparency might claim the place of the first crypto bank in the world. But an obligatory condition of it is a guaranteed free conversion of stablecoins into fiat, which at the moment doesn't look quite possible.


So, Tether stablecoin has been raising suspicions of not having any reserve at all for several years. Now, when the fact of supplies ties the company down to unreliable assets, the token reputation is in great danger. 
We were wondering, what scenario could make USDT more resilient - not being supplied with real assets or being supplied with the capitals from communist China?

Of course, fiat money cannot be fully supported with liquid assets, moreover, it is impossible to exchange fiat money for this asset instantly. It is about digital money.

Creating digital money protected from inflation with purely mathematical methods seems quite possible to us.

All we need is to create a mechanism to syncronise the value of emission of such money and goods inflation. Then the value of such money would change along with the rising value of the goods.

A US Congress senator Cynthia Lummis declared requirements to stablecoins emissions, the main of them being: to supply stablecoins for 100% with cash reserves or its equivalents, and obligatory for all stablecoin issuers to have a status of a bank or a money market fund. Also, Ms Lummis outlined that it is necessary to perform regular audit checks of issuers.

Ms Lummis is known as crypto supporter. In 2020, her programme included discussing Bitcoin on a national level. In August 2021, Cynthia Lummis was one of the authors of an amendment to a crypto infrastructure law - they were asking to exclude some companies of the crypto industry from the taxation plan. Today, on September 30th, there will be final voting on this law.

The main source of argument is the generalized definition of a 'broker' that is supposed to be given to the majority of industry participants, including non-custodian ones: miners, node operators, wallet developers, liquidity providers in DeFi protocols, etc. It will make them report users' operations to the Department of the Treasury, the US tax agency.

The US Ministry of Finances is also planning to introduce measures for stablecoins regulation. For instance, in September their plans to make stablecoin issuers provide for their easy converting to fiat became widely known. In the July session, they discussed perspectives for stablecoins and potential risks for end-users, the financial system and national security.

Stablecoin issuers show that they are partly or fully ready to accept regulation and taxation. In August, the Centre consortium that issues USDC declared its intention to transfer the token reserves into USD and government bills. USDT Tether Limiited issuer noted in its July report that the proportion of the funds and bank deposits that can be withdrawn in two days and less amounted to around 10%. Paxos company confirmed having 100% supply for every USDP and BUSD with US dollars or its equivalents.

The American CryptoFed company, registered in Wyoming as the first decentralised autonomous organisation (DAO), sent a request to the United States Securities and Exchange Commission (SEC) for registering and trading an algorithmic stablecoin Ducat and the Locke governance token that is used to stabilize the first one.
Both coins will follow a service function in the blockchain designed by CryptoFed based on EOS with a DPoS consensus algorithm.

It turned out that CryptoFed made their application by Form 10 which is normally used for the registration of securities on stock exchanges. This is an obligatory requirement for companies with capital over 10 mln USD and with a number of stakeholders exceeding 750; the rest can take part of their free will. So now The American CryptoFed can expect their tokens registered within the next 60 days.

Officially, the Ducat stablecoin is presented as an asset safe from inflation/deflation that is used to save capital and make "free" transactions with high capacity. The Ducat rate will be stabilised by the Locke governance token. According to Marian J. Orr, a CryptoFed representative, managing the Ducat rate with the help of Locke is quite the same as the actions of the Fed in the open market.

If Ducat and Locke are successfully registered as securities, CryptoFed is planning to request permission for new emissions of tokens according to Form S-8. This will enable them to continue distributing non-traded and disqualified Locke freely as a stimulation.

Thus, The American CryptoFed is expected to become the first-ever company with crypto officially registered as securities. This was all possible due to the fact that Wyoming accepted a law that made cryptocurrencies equal to money in 2019 and to the times when crypto start-up Avanti and Bitcoin exchange Kraken were awarded the status of financial institutions back in 2020.

The idea to make a coin protected from inflation and deflation is really relevant now, however, the authors of Ducat don’t share the methods that help them reach this stability of the coin’s purchasing value. Looks like these will be centralised methods. Which means that these methods will be similar to the methods the Fed uses to USD, yet the inflation for dollar is not equal to zero.

Which means that Ducat is another pseudo-stablecoin. What about you, dear forum users, what do you think of it?

The e-Money protocol is about to integrate their stablecoins into the Algorand blockchain platform and connect them to European currencies.

E-Money expects that after this partnership with Algorand, they will be developing faster and will manage to scale up their apps for accounts in currencies that have become popular with European users. These are stablecoins based on Euro (eEUR), Swiss Franc (eCHF), also Swedish (eSEK), Norwegian (eNOK), and Danish (eDKK) Krones.

Users' trust in e-Money stablecoins is associated with the fact that these tokens are supported with a reserve that consists of bank deposits and government's obligations, as well as quarterly audit revisions by Ernst & Young.

According to David Markley, the Algorand Director of Business Solutions, "Integration with e-Money will enlarge the common access to the Algorand ecosystem and will help the European market grow for many innovative and useful protocols in the network, from DeFi solutions to NFT trading platforms, and more."

We would also like to remind you that a year ago Algorand Foundation launched a business accelerator to support European start-ups in the blockchain ecosystem. To support such initiatives within the Algorand ecosystem, the Arrington XRP Capital company created a foundation of 100 million USD.

Also, last week Algorand Foundation opened a fund for developing DeFi projects. The company gave 150 million native ALGO tokens, which is equivalent to 318 million USD at the moment when this article is being written.

The day before yesterday, Tether processed an emission of one billion USDT on the TRON platform. The Tether CTO Paolo Ardoino claims that this is an autorised, but not an issued transaction, which means that these stablecoins will be used as inventory units for issuance requests in the future and as chain swaps.
According to the official report on Tether activity, the total amount of USDT in TRON is equal to 32 billion USD. In other words, over the current year, Tether turnover grew by 300%.

Other stablecoins are also growing: USDC capitalisation in 2021 grew by 600% - from 3,7 billion USD to 27.59 billion USD; DAI stablecoin grew by 380% - from 1,1 billion USD to more than 5 billion; the number of Binance stablecoins BUSD grew by 1230% - from 980 million to 12 billion tokens.
The further growth of Tether is so far contained by legal investigations and audit revisions of company assets. If the revision results are positive, it will return the attention of investors to Tether and the USDT stablecoin will continue growing.

We can see that Tether is inevitably gaining traction, but it is still questionable if the whole volume of Tethers and their cash cover are equivalent.
Even if we accept that Tether is 100% covered with convertible currencies, the mechanism of receiving this cash cover from the issuer remains completely unclear.
Can we call Tether an ideal currency? We don’t think so, what about the forum users?

Meanwhile, this is what going on in the world of stablecoins:


USDC issuer started creating "a global network of stablecoins".

The Centre consortium started a project for distributing USD Coin abroad.
The company already formed a team for managing the project and started negotiations with foreign partners about launching USDC in countries of Africa and Asia.

The Centre is planning to use stablecoins to make money transactions cheaper. Also, the company representatives mention that they might issue stablecoins that would be connected to other fiat currencies. It is planned to start the distribution of USDC with the countries of Europe.

Today, USDC stablecoin is present in Tron, Ethereum, Solana, Algorand, and Stellar. It is planned to issue the coin based on Polkadot, Avalanche, Hedera, Celo, Nervos, Flow, Kava, Stacks, and Tezos.

Another ambitious project of the issuer company is to use USDC as a payment method. This is why they are planning to integrate USDC into NFT, non-fungible token, system.

One more step in this direction is signing a contract with Visa company that has already linked its global system to USDC and started testing the account system in USD Coin.

We would like to remind you that USDC, unlike USDT, has a stronger regulatory base behind it, yet it can't be considered a perfect currency for payments due to its strong relation to the US political decision and the unpredictable SEC.

Hello. Thanks for your answers!

Absolutely, there are many stablecoins now that have financial provisions behind them. But none of them can take the place of ideal money.

1) If we look into centralised custodian currencies like USDT, their provision is very questionable. There is no way how one could reliably check the level of provision behind them, and, most importantly, there is no way how one could exchange these coins for a provision from the currency issuer (Tether company).

2) Centralised stablecoins like DAI are better in terms of transparency of their provision.

However, in both cases, stablecoins are not suitable for becoming ideal money.

By ideal money I mean not only the money supported by assets, but also the ones that are perfect for accounting and for saving. In other words, money with no inflation.

Let's say, we managed to create such money, without inflation, with full provision, and call it Ideal Reserveum.

What are the features of an Ideal Reserveum?

Who should regulate its emission, and how?

How should one form its provision?

How should one define its price?

Let's talk about this thing: How to create Ideal Money?

Why don't we call our hypothetical perfect currency, let's say, ASSETRIX. There is double meaning in this name:

1) an ideal currency of the future that must be totally asset-backed.

2) an ideal currency that is to become the global reserve in the future

Is it even possible to create such ideal currency?

What features should it have?

Please share your thoughts and opinions.