The fallout from Terra losing its dollar peg continues.
Welcome to The Daily Forkast, May 11th, 2022.
I'm Megha Chaddah of Forkast covering all things blockchain.
US Treasury Secretary Janet Yellen has now weighed in on concerns over the outlook for
Stablecoins.
But what does it all mean for investors?
We'll take a look at that, plus a whole lot more coming up.
Let's get you up to speed from Asia to the world.
Join thousands of NFT traders who already start their day on CryptoSlam.
Let's kick off with a warning from Janet Yellen over the risks that stablecoins present.
Speaking at a hearing before the Senate Banking Committee, the US Treasury Secretary reiterated
her stance that regulation of stablecoins is needed.
Yellen cited Terra's algorithmic stablecoin UST experiencing a run and decline in value
as an example.
So I think that simply illustrates that this is a rapidly growing product and that there
there are risks to financial stability and we need a framework that's that's appropriate.
Yellen said that shooting for the end of the year as a goal for that framework would be
appropriate.
The latest Federal Reserve Financial Stability Report published this week highlighted the
same risks Yellen did, as well as warning over a lack of transparency.
Back in March, US President Joe Biden issued an executive order asking federal agencies
to coordinate efforts and produce reports for regulation and policy on digital assets,
including Stablecoins.
Meanwhile, according to data from Coingecko, Terra's UST had still not regained its US
dollar peg, falling as low as US$0.70 on Wednesday morning in Asia.
And Forkast's Editor in Chief Angie Lau is currently in Singapore where she caught up
with Erik Anziani of Crypto.com getting his thoughts on the situation and what it means
for the wider market.
What a day for crypto right now.
But specifically, Terra.
A lot of people concerned about what this means for Stablecoins in general and not just
algorithmic.
Do you think that that is triggering a bigger wave of hesitation of of concern of FUD?
I think Stablecoins do play a very important part in our ecosystem today and I think we
haven't found yet the perfect solution there.
And so we have to continue to experiment.
It's definitely there will be a lot of learnings from the experiment from Terra.
I think for consumers it's important to look at how the stablecoins are structured, how
they are collateralized, how they're managed in case of large market movements.
We've entered since the beginning of the year to very volatile and choppy market conditions.
So it's very important to do your your research and be careful when you invest in this kind
of project.
But I think overall for the industry, we need to continue investing in terms of research
and trying to find right solutions that are decentralized, potentially algorithmic, that
can sustain difficult market conditions.
A lot of major cryptocurrencies obviously have stabilized, but whether or not that that
means, you know, calmer waters ahead, that's for anyone's call to make.
But from from your point of view and over the past couple of years and certainly being
a participant in the macro economy and market cycles for a long time, how do you view what's
happening right now?
Well, we're definitely entered a more bearish market conditions, I think, over the last
four or five months already.
Volumes are down.
The liquidity is quite thin and the macro environment is very challenging, whether it's
probably soon the end of the quantitative easing in the US, the inflation going up quite
significantly, the rising interest rates in quite a few markets and of course the ongoing
conflict in Ukraine and all these macro environment combined with the fact that we've moved out
of a bullish cycle changing and we do expect for the next few months for these market conditions
to be to be tough and we have to be prepared for it.
As a business, we are focused, we continue to invest in our people, building products
that make sense for our customers and ensuring that we are ready for the next cycle.
Do you anticipate that we will see more of these events, that more firms, more projects
will become vulnerable to these market conditions for sure?
During bearish market cycles, some projects and companies do not sustain.
It does happen.
So we have to be prepared for that.
And that's why it's very important to make sure you look at the companies you invest
in to what their track record, whether they've been through those cycles before.
So they have the learnings and they're able to build for the next cycle and be there.
Awesome.
Erik, thank you.
Thanks for that, Angie.
Over in China, plans for adoption of the digital yuan or e-CNY are hanging in the balance with
the spate of lockdowns due to COVID-19 outbreaks slowing the country's economy.
The Asian Games was set to be a showcase event for the central bank digital currency, but
they have been postponed as a result.
Forkast's Jenny Ortiz reports.
The People's Bank of China's plans to fast track adoption of the digital yuan or e-CNY
in the country have hit a bump in the road.
Part of that plan involves showcasing the e-CNY at the Asian Games in the eastern province
of Hangzhou, which are set to begin in September.
But just last week, the Olympic Council of Asia announced that the continental multi-sport
event had been postponed to 2023 due to the repeated outbreaks of COVID-19 in China.
Meanwhile, mass lockdowns in the neighboring city of Shanghai have caused the country's
economy to slow down.
So what could this all mean for the rollout of the digital currency?
The Hangzhou Development and Reform Commission office said the pilot plans for the digital
yuan in the city will continue.
But an official who declined to be named, told Forkast that the central bank is leading
the project, and the central bank's office in Hangzhou declined to comment.
As for Stanley Chao of US based All In Consulting, he believes the postponement of the Asian
Games will not have a direct impact on the digital yuan.
Chao said it's the COVID-19 lockdowns that could affect the rollout of the e-CNY as Chinese
consumers are aren't in buying mood.
And this is definitely not the proper atmosphere to test the yuan.
He added that the digital yuan has been pushed down the priority list and we may only see
its full rollout happen in two years.
The e-CNY app was made public to residents of pilot cities beginning last January, and
to date, over 81 million users have downloaded the app.
For Forkast, I'm Jenny Ortiz.
Australian Fashion Week is underway and features a nonfungible token couture outfit.
BTCMarkets, an Aussie crypto exchange is partnering with the Fashion Week for the luxury NFT,
which will also be available to buy in the physical form.
What does Yohan Calpu, VP Chief Marketing Officer at CryptoSlam - a Cross-Chain NFT
data tracker and aggregator, make of the moves being made by NFTs in the fashion world.
Thanks for joining in once again on NFT Insider, Yohann.
What do you think of having a crypto partner for Fashion Week?
Thanks for having me Megha.
This is an interesting, interesting topic.
I think fashion lends itself quite well to NFTs.
It being digital does not hold it back.
I feel.
I think there's always going to be some kind of collectible or some kind of digital item
that enhance and also add value to the in real life object.
In real life, objects can wear away, they can fray, but digital objects cannot.
And there's just a little part of a digital object if if it goes along with it in real
life object, that can add a lot of value.
So I think it's a great idea.
Now this tie up from down under follows on the heels of Metaverse Fashion Week held on
Decentraland in March.
What are your thoughts on the moves in virtual fashion?
Are the strategic at this point?
Are we seeing real traction?
Is this a new way of holding fashion shows, selling your fashion collections?
Yeah, it started during the lockdown season where I believe, like a lot of events were
held in the metaverse.
So I guess those kind of had a great use case for holding events and getting people to socialize
in a digital metaverse.
And now we're just seeing more and more of it.
Like people are understanding that bringing people from across the world to one location
to observe an event can be done quite efficiently and logistically better in the metaverse digitally.
Obviously, it's not ideal, but definitely there are good things to have and good experiences
to have when they do things like this.
So I do think there's good traction and real traction there now.
Julianne Moore auctioned three couture gowns as NFTs to raise money for a cause some time
ago, and the buyer got not only the NFT but the gown itself.
Now, that's quite interesting as the real and virtual world seem to be converging.
Yes, exactly.
And also, they can create like little clubs around their fashion, maybe have it for Genesis
members or certain NFTs give certain benefits.
I don't know, maybe some different shopping experiences, discounts, things like that as
well too.
So definitely a lot that they can do with the technology.
But yeah, I do see like a little membership club, a loyalty program associated with these
brands as well too.
So I know you're a big gamer.
Have you checked out the Louis Vuitton NFT game?
It's been downloaded 2 million times.
Another way for luxury brands to follow our engagement.
Right?
Yes.
And I guess they're trying to get younger as well.
The demographic for NFTs are a bit younger, so not too much younger.
But I believe that they do want to gain traction with a new crowd as well too, and further
their brand into that that demographic as well, too.
So now Italian fashion house Gucci has been dipping its toes in Web 3.0 for a while now.
They came out with a Gucci Grail NFT collection, a digital Gucci bag sold for over US$4,000
on Roblox, and now they're going to start accepting crypto payments in select stores.
So it looks like brands ranging from high fashion to mass market, like Nike, they're
trying the best to connect with existing audiences and possibly even bring new people into the
fold.
Yeah, I mean, it's all about loyalty and it's all about engagement of the people, of the
buyers.
So they're going directly to the collectors, they're going directly to the fans.
And I guess people who own NFTs have an ownership in the brand in a certain way, and I guess
that's what they're going for.
I believe when I own an NFT, I personally feel like a belonging to that certain brand,
and I think this is the feeling that they're trying to get with some of their customers
and the buyers of these NFTs that they're sending out and creating.
So it's about furthering that connect, isn't it?
I mean, talking about fashion, is there any of these fashion brands that have struck your
fancy, your hand?
Not really.
I'm waiting for the one that does, though.
I totally get it.
And I and I saw one the BLVCK Paris one that that has a genesis NFT there's a there's a
drop on dropping now that that has that and it's like I keep eyeing it so it seems like
they are doing this genesis like loyalty program.
You know you buy this in NFT and you become part of that club, you become a member of
the Genesis family, I guess you would say, and then you get certain benefits.
So I totally get that.
And who knows, maybe after this interview I'll actually go pull the trigger on that
one.
Well, that would be fabulous, wouldn't it?
And it's all about having that integrated experience.
You're no longer just living in these silos.
It's about everything coming together in all aspects of life.
Thank you so much you had for joining in.
Thanks for having me, Megha.
Interesting conversation.
Thank you.
And finally, a reminder that there's still time to sign up at Forkast.News to join our
crypto rising discussion tomorrow, looking at how the crisis in Ukraine will shape the
age of crypto and decentralization.
Forkast's Editor in Chief Angie Lau will be taking a deep dove with Illi Polosukhin of
NEAR Protocol and Caroline Malcolm of Chainalysis.
So why not join them?
And that's The Daily Forkast from our vantage point right here in Asia.
For more, visit Forkast News.
I'm Forkast's Megha Chaddah, until next time.