Full text of the speech of the founder of FTX at the SBF congress: The future of products and finance

President Waters, Senior Member McHenry, Committee Members and Distinguished Guests, thank you for inviting me to testify on this panel. As a member of this committee, I am very happy to be able to share information and ideas about the digital property industry, the House and Parliament to discuss a wide range of issues together. I am very excited to work with my colleagues and partners to provide as much information as possible in order to have an in-depth discussion on “if and how this group is addressing some important issues”. for

FTX Context

As an exchange or trading company for the cryptocurrency market, FTX Group was established in 2019. In the United States, the company is a government regulated and ministry licensed exchange. Oversees the Financial and U.S. Commodity Futures Market (CFTC). FTX was created by 3 Americans: Samuel Bankman Fried, Gary Wong and Nishad Singh and has been operational since May 2019. The purpose of the creation of FTX is to develop a platform for the exchange and exchange of digital heritage. , and we are committed to improving new products that provide better user experience and adequate protection to our customers. FTX created the FTX.com exchange to create a platform that is robust enough for business applications and practical enough for new users. for

Since newbies have extensive experience in engineering on Google and Facebook and marketing on Wall Street, they have specialized experience in creating zero for a trading platform and understand that this platform does not have to be. 'heritage. Impact of technology or industrial model. FTX aims to provide the best possible financial management practices with a digital heritage ecosystem. for

finished early. The FTX.com exchange has been a success since its inception. The platform's daily turnover this year is estimated at $ 15 billion, which is now around 10% of the global cryptocurrency trading volume. The FTX team has over 200 employees worldwide, most of whom are responsible for compliance and customer support. FTX Group's global headquarters and operations are headquartered in the Bahamas, and under the Digital Assets and Registered Transactions Act 2020, the company is registered as a digital entity with a presence in the Bahamas. for

Besides providing competitive products, FTX is also known for its high performance and reliable exchange. In a time of turbulence for the entire digital real estate market, the FTX.com exchange faces short delivery times and performance issues compared to its major competitors. The main reason that the FTX exchange has been able to compete with other exchanges since January 2020 is to ensure that the fastest growing packaging industry is focused on consumers and products.

The main product is the FTX.com website (This site provides a way for crypto assets to enter the market. Platform users can also enter the market. Print from an FTX mobile application ), vertically integrated technology A output (integrated engine support.), application programming interface or API, stored services and wallet for users, payment, withdrawal and machine risk . In modern business, only buyers, sellers, and exchanges are involved. for

FTX Group operates and is licensed in several countries around the world, including the United States. At the time of writing, the FTX platform has millions of registered users and the FTX US platform has approximately 1 million users. For FTX.com, approximately 45% of its customers and subscribers are from Asia, 25% from the European Union (EU), and others from outside the United States (excluding employees) in the penalized country ). Almost all of FTX.us users are from the United States. for

American company. FTX works for US clients through the FTX US platform, which also includes FTX US derivatives. FTX US is an independent company with the same management and investment capabilities that the whole family is involved with through its FTX.US website and mobile app. Like FTX.COM, FTX US's key market is the exchange of digital assets, and like other cryptocurrencies in the US, the trading platform needs a license to operate as open source. FTX US is headquartered in Chicago and has offices in other cities in the United States.

FTX US Derivatives was developed through the acquisition and refinement of the LedgerX brand and is a current division offering future digital and contract options and other options for both US and non-US. is a US citizen. FTX US Derivatives has four trading licenses issued by the United States Commodity Futures Trading Commission (CFTC): Creation of Common Goods Contract License (DCM), Swap Execution Installation License (SEF) . Authorization of Authorized Representative (DCO) and Chief Executive Officer (CPO) Authorization. Prior to its acquisition, the industry was the first crypto-based platform to obtain a Certified Public Accountant (DCO) license issued by the US Commodity Futures Industry (CFTC) in 2017. It is a milestone for the entire cryptocurrency organization and industry. This license was amended after 2019 to allow for future contracts.

Commitment to multicultural work. FTX has a dedicated team and believes that a team culture of respect and cooperation is one of our core values. Team culture comes from a diverse group of people and requires understanding, understanding and humility. These features help improve business and are an important reason FTX can understand the needs of customers and provide them with the products they need. FTX staff come from all over the world and from diverse backgrounds, and 60% of the women in the group are leaders.

Commitment to climate impact mitigation. FTX takes environmental issues very seriously and always strives to reduce the impact on our lives and our work from the global environment. As a company, FTX has done a lot of important things to ensure this. Here, we'll explain why FTX has the least impact on the environment, one by one, and explain the additional steps FTX has taken to further reduce its impact on a ride. for

1. FTX does not use the global shipping network due to lack of manufacturers or physical equipment. International transportation is an important part of consumer electronics. FTX has few staff and few physical offices. As a result, the FTX market economy has no direct impact on global climate change. for

2. The deposits and withdrawals of digital assets on the FTX platform use the power required by the public channel to support and document these changes. However, over 80% of deposits and withdrawals on the FTX platform use low-cost, carbon-based public proof-of-stake (PoS) channels. The public chain of this PoS process is different from the public chains of Proof-of-Work (PoW), where PoW needs more power to run the network (the Bitcoin blockchain is a small example). By using the open chain mechanism of PoS for most FTX deposits and withdrawals, FTX has reduced the security of the blockchain. In order to reduce electricity consumption due to deposits and withdrawals by the remaining 20%, FTX supports blockchain network charges to cover electricity tariffs. FTX separates deposits and withdrawals, and trading and trading (eg, running most users) does not require community service, only the required power worked in network marketing. for

3. At the same time, FTX is still trying to cover part of the mining environment costs related to public channels and has purchased carbon offsets to reduce these costs. It is very difficult to predict the energy consumption and carbon emissions associated with blockchain mining as it is difficult to identify the location and cost of the energy consumption due to the nature of the operation. mining. . However, FTX still estimated the value at $ 1 million and purchased a total of 100,000 tonnes of carbon offsets from two vendors for $ 10.16 million. Additionally, FTX, through its partnership with FTX Security, has developed a comprehensive plan to focus on solutions that have the greatest impact on climate change. In addition to realizing carbon intermediaries, our initial initiative will fund research that we believe could have a major impact, and will support other operations and specialized solutions to carbon removal problems. FTX plans to invest at least $ 1 million per year through FTX Securities. If you are interested, you can read more information at https://www.ftx-climate.com. for

4. FTX believes that the power consumption and impact of PoS networks should be considered in the relevant context, and that assessments should be included to determine the benefits, understand the differences between networks of PoS mechanisms and the use and development of each type of network. Comparison with other energy and industrial applications. Bitcoin, for example, has already benefited many people in terms of acquiring financial instruments, converting assets, and building wealth, and these benefits need to be weighed against the cost of the power grid. for

Moreover, although the power consumption of the PoW networks is favorable, the PoS networks have higher efficiency in the market in a shorter time and at a lower cost, which allows further increase in the market share. FTX believes that this PoS network will become more important over time. Over time, the PoS network will continue to reduce the impact of the entire blockchain on the air. Finally, the energy consumption of PoW blockchains is also lower compared to other industries, especially Bitcoin networks, which are often compared. Among the assets for futures trading by CFTC regulators, Bitcoin ranks very low in terms of environmental impact compared to traditional mining goods, oil, livestock, etc., which really have an impact on the economy. environment.

Promise to come back. FTX is not only committed to improving the lives of our customers with quality products, but also to improving the lives of communities around the world. To this end, FTX has established the FTX Foundation with the aim of donating to some of the best organizations in the world. FTX is committed to donating 1% of its income to the grassroots. To date, FTX, its partners and staff have donated over $ 10 million to save lives, prevent poverty and improve a better future for all. for

brother Tham

In this section, we'll cover the following topics:

(1) Products supplied by FTX and its role in digital assets.

(2) how to deal with the risks associated with these fixed assets and assets;

(3) Current regulations and guidelines that guide policy makers to achieve sound policy.

In discussing these issues, I will use FTX International and FTX US as the differences between FTX markets and non-US and US markets. ...

Since all of the essays contain a wide range of topics, my language has many important meanings.

1. FTX supports one merchant and one customer. The products we offer are easy to obtain and affordable, empowering customers and consumers to achieve their business goals through easy choices. They can easily get their financial assets from anywhere (many people use their cellphones to do this), FTX does not have monitors to measure rent and there is no risk to investors. in the process. This is the heritage of the digital ecosystem. We understand the daily life of participants and help them set up a secure business process. These simple financial tools provide support and involvement in environmental policy (equivalent to other objectives of the law) to further support the entrepreneur. for

2. FTX designs and delivers the business model platform with reduced risk. Obviously, there are artists who have no role in the digital real estate industry that has been broadcasting media. However, FTX is not such a person, and the fact that FTX has made the platform flexible and less risky is a competitive advantage as well. So as long as the decision maker is able to respond easily as long as they allow a 24/7 direct customer business model that minimizes risk and exempts them from custom business support models, the FTX model will be able to do so. the transition to the world's highest risk model is necessary. All control. However, these business models are not the best for entrepreneurs. for

3. The FTX is regulated by the highest level of government in the United States, including the US Commodity Exchange (CFTC) and the United States Department of the Treasury, with strict oversight by other agencies around the world. and the state of the United States. As noted below, FTX hopes to promote and work on a common federal policy. However, FTX oversees the management in terms of stakeholders and stakeholders, and we believe that FTX should have regular discussions with them, and that this also applies to the US Congress. FTX has always welcomed and wanted to share our knowledge about the digital real estate industry and how it can improve people's daily lives. for

Of course, the future is difficult to predict, but FTX believes digital assets and more blockchain technology will continue to provide a happy opportunity for consumers, investors and businesses. The FTX believes that the United States should continue to be the emerging leader in the country at this time. FTX supports the entire regulatory process for trading digital assets to protect customers and complete the corporate signature. In order to maintain a leadership position in the United States, lawmakers must look to the best of the digital real estate industry while continuing to pass the best pieces of the law that already exist. It is also a measure to reduce the risk of trading.

1. Market for FTX products and their role in digital assets

Main characteristics: Changes to the heritage. As mentioned above, FTX's main products are the digital exchange services FTX.com and FTX.us. Both platforms allow users to trade digital assets with other users in exchange for cash, fixed coins and other digital assets. Users can configure multiple types of orders in the Spot Exchange Limit Order Book (CLOB). The user can place an order at the special price (limit order) or trade on the average order book (CLOB) at the higher price. The system has a robust system that can connect buyers and sellers to order and display the best value for money. for

Future and volatility deals regarding digital assets, whETHer leveraged or not, are set on the platform. The power limit on the FTX.com platform is 20x, and so far FTX.us users cannot use the power. These platforms list monthly payments (and futures contracts are only available on FTX.com) as a cash payment method. FTX.com also offers MOVE volatility. The MOVE volatility contract is similar in the future, but is not limited to the price of digital assets, but as the value of Bitcoin's value moves on a day, weekly or quarterly basis. FTX.com also lists Bitcoin options for trading. Finally, FTX US Derivatives offers Bitcoin and Ethereum (ETH) options, futures, and exchanges to US users. for

To pay early edges and maintenance equipment or equipment / use funds in the financial statement, even resolving recording and resolution Using the Transportation Prices (Changes), and delivered at the digital market or digital gift and selection members' legal status Bridge (breathing) and financial users. Payment or delivery for delivery. Weekly businesses show that FTFORMENT is risky reduced items. In December 3, 2021, multiple digital equipment lost in a short period of time, and assets are increased by FTX platform. This is especially the most fulided machine is to make quality and starting with the clients affect the liquid platform. The store will take place, and after US market over a long time. However, due to time transferring of digital equipment, FTF label discete now in response only before the useful user is free. If this situation appears in normal business, the risks do not respond immediately, but the market will be repeated after two days. At this time, the place of buyers can fall down and have the opportunity to prevent the user's financial. The key is that FTX strategic risk is taken to prevent risks and wages that are not allowed in the holiday or other shop.

Offsite portal to identify and match user orders. FTX.com also provides a website where users can connect with other major users, request quotes for physical assets, and trade directly. The portal sends requests to key users, returns quotes, and allows users to place orders. It has a similar impact on other parts of the traditional industry. In a traditional business, the middle decision does not apply to the competitive market. for

Ready. Users of the FTX platform can lend digital assets to customers who need them for business purposes. If users want to get digital assets that they don't have (such as qualified FTX.us users), they can lend them digital assets to users through advertisements. their cash. .. Loans The FTX platform offers a mix of loans that suit both borrowers and lenders. for

TVN industry. FTX operates a store where users can advertise, buy and sell non-counterfeit tokens (NFT). NFTs are non-convertible tokens. There are many different uses, for example, for exchanging devices or physical experiences (like making movies or making phone calls) or for engaging in digital photography. FTX's NFT trading is done in a one-way auction. Consumers can also buy directly from the seller at the going retail price. Users can choose to display their NFT collection on the NFT FTX Marketplace Portal, continue to buy or sell on the NFT Marketplace, or both. The NFT activity is open to users of FTX.com and FTX.us. for

FTX payment (FTX payment). FTX Payments is a service that enables merchants to accept digital assets or fiat currency payments. Users can use their ACH card or credit card to enter their FTX number, then use their FTX number to pay registered merchants. In the case of digital payment assets, the user's FTX account is deducted from the selected digital assets, which is equivalent to payment to the merchant. FTX provides a convenient payment system for users to pay their customers. for

To borrow money. FTX.com gives its users the ability to "loan" certain supported digital devices through its platform. Users can qualify for loans by participating in these digital tools, and users can also use certain tokens on the FTX platform to earn and activate certain perks such as lower fees, deductions, and other rewards. Typically, users can 'unsecure' their digital devices at any time, but must wait until the deletion or release time expires. For digital devices with certain features, FTX may allow users to launch them instantly by paying a publishing fee.

The digital heritage of the FTX platform. FTX develops the registration model and procedures and determines which assets can be collected on the FTX platform. Some registration procedures and procedures require that the valuation of assets be secure, compliant with risk, legal risk, business risk, etc. On FTX.com (not available for US users), FTX lists up to 100 fixed coins and other digital assets on the stock exchange. Digital assets include tokens such as Bitcoin (BTC), Ethereum (ETH), UNIswap (UNI) protocol tokens, Chainlink (LINK), Solana (SOL) and Aave (AAVE) tokens. Stablecoins include tokens such as USDT (USD Tether) and DAI. for

At FTX.us, FTX has taken the lead in digital marketing tools and marketing. Due to FTX.us' strict registration process, a small number of tokens are listed and traded on FTX.us. The FTX.us platform is taking steps not to overload the tool with US security features. Trademarks and tokens are similar to Bitcoin and Ethereum (both tokens are clearly recognized by the CFTC as trademarks of their respective rights). for

Overall, after a quick review of this product, we come to the following conclusions: The market share of current digital assets and FTX platform are similar to the industry, financial trading is still available. This reflects the growth of the market as more and more mature entrepreneurs enter the space and need products and solutions that are familiar with traditional finance. . for

Likewise, the decision of these products, which differs from the traditional budget, is that merchants can get all of their products on one platform without having to go through many average people. In addition, all trade information is public and free, and all users can understand all of their orders and transactions. Easy access to financial products and solutions on an easy-to-use platform is a powerful force that empowers investors, consumers and businesses. By simplifying the use of these tools, users can focus on their daily financial goals and priorities. This is why we believe that FTX can promote openness and financial security for many people. for

2. Stablecoin The benefits and risks involved

FTX believes that fixed currency is one of the most significant payment processing innovations in the digital asset industry, and users of our platform rely on fixed currency for payment and settlement. FTX recognizes the important role of the president of the stablecoins industry and has read with enthusiasm the recently announced “Release of Stablecoins”. FTX has published advice on how best to ensure the safety and security of titles, of which I will write proof. To continue, please click on the link https://www.ftxpolicy.com/stablecoins .read. for

In addition to the recommendations for stable financial governance, FTX believes that there are two key points that should be addressed to this group.

First of all, the team needs to understand that FTX believes that there is currently no government that protects people from fixed income securities in the form of banks. dangerous. In fact, FTX decided to use fixed funds for large-scale fund exchanges, including mergers and acquisitions, rather than payments made by traditional companies. ...

Although some people believe that using fixed coins is less risky than strict payments at financial institutions, the fixed exchange rate has almost always been decided immediately and the parties to the exchange check their wallets on the public channel. It is very different from the general method of wire transfer in terms of deposit approval and ease of payment. During the wiring process, there are many differences between sender and sender, all at the risk of others, it may take several days to complete and decide, and the cost is very high compared to an exchange rate stable. Other payment methods (such as ACH or credit card networks) also have significant billing restrictions and issues, but these issues are hidden from users.

Therefore, FTX does not believe in the assumption that “financial management of all stable suppliers is the best solution for consumers”. What worries us is that hedges, like banks, could not intentionally present the risk of current fixed income being exempt anyway. However, we understand that the supplier and the security deposit provided by the advertiser must meet certain key requirements and standards, including:

1) Daily proof that assets (cash, contracts, etc.) support fixed coins

2) Regular monitoring to ensure support equipment meets requirements

3) Damage to intermediate assets

4) Provide a hotline for law enforcement agencies to blacklist addresses and participants in financial crimes.

These key rules can be applied to a variety of regulations, including the governing bodies of non-governmental financial institutions such as the CFTC or the Securities and Exchange Commission (SEC). In fact, members of Congress have already called for legislation for these administrations. for

Second, FTX believes that using stable coins with proper security procedures will protect them without affecting the global currency, the US dollar. Again, this point of view may seem plausible, but most of the modern coins used are pegged to the US dollar, so ultimately those stationary coins will always be in US dollars. Such measures only support, but do not threaten, the world continues to depend on the US dollar. In fact, the FTX is concerned that excessive fixed currency regulation could put the US dollar at risk on gains, as fixed markets will have to move to other places to decide and focus on the US dollar. for

Obviously, some level of competition from suppliers will be in the best interest of the consumer, and US developers have already licensed or sponsored the competition. FTX is aimed at policy makers, where new developments (such as fixed coins in the payment system) are often used outside the regulatory framework, i.e. resources in the same area usually do not provide the goods the business needs. . However, in order to ensure that new developments continue and that health competitions continue, policymakers need to be careful to be fair and not force all developers to adopt the same rules. FTX values ​​its prior understanding of the benefits of new developments such as a stable coin ahead of the expert group's work and the recommendations of the PWG report. for

3. Problems encountered while monitoring the market and the operation of US crypto platforms

The committee has already asked about how best to monitor cryptocurrency platforms in the market, and some committee members have called for the content to be legal. Other lawmakers have questioned the need for federal law. We are grateful for that. for

Last week, FTX announced “Key Concepts of Financial Management on FTX's Cryptocurrency Trading Platform”. I'm writing it here as proof of my post and readers can find it by clicking https://ftxpolicy.com. This information was created and communicated to the Board of Directors and other policy makers on how best to protect investors and serve the public through regulatory oversight. appropriate copy of cryptocurrency platforms. for

There are a few details in the FTX Core Principles document, but I would like to mention a few key points for team decision making. for

1. By providing a framework for the oversight of the sites and derivatives of the cryptocurrency trading industry, policymakers should be able to obtain a legal framework with the objectives of existing policy applicable to existing capital and to market capitalization. The objectives of the current policy are important to all businesses, including protecting consumers and customers, promoting fair trade, preventing financial fraud, and ensuring the safety and integrity of the entire market. system. FTX believes that all new policies associated with cryptocurrency platforms should achieve these goals. This is a consideration in the Commodity Exchange Act (CEA), the Securities and Exchange Act of 1933 and the Securities and Exchange Act of 1934. There are many principles that affect our business. . FTX believes that it makes sense to apply these goals along with the knowledge and expertise of the CFTC and the SEC, where applicable. for

2. FTX and other cryptocurrency platforms have brought significant innovation to trading. Good policy should support as many of these new developments as possible. Because these changes can help reduce risk, increase capital, and protect investors. As noted in this section, some important changes include: (1) risk management which ensures that consumers are able to trade a variety of assets without risk; negative aspects of the consumer's position; (2) every summer on a market scale, reduce risk by enabling the industry and its systems to manage risk without disruption and enable the long-term operation of the industry. Reduce conflicts of interest (4) All platform users receive free business information so that the interests of traders are aligned with the market. ...

3. The implementation policy will allow cryptocurrency platforms to provide the location and marketing of cryptocurrency assets as a system, and to use regulatory and technological processes to control the risk associated with any. consumer transaction. do it. By dealing with mature industries, such as the United States, regulatory measures for the fragmentation of securities, commodities and derivatives for these assets are developed. FTX has discovered that the combination of assets and derivatives in these assets provides significant benefits to investors. These results are achieved through end-to-end technological utility (user interface) to the back-end (where payment and risk management are located), including procedures that apply to all business plans, financial and risk. Due to risk reduction and consumer protection, public policies should allow the continued development of this book. for

Achieving this goal requires the integration of different regulators in areas where multiple regulators, such as the United States, have the power to change the crypto-heritage model. Our key data indicated that crypto platform providers can participate in the oversight of the CFTC and SEC joint venture by using one of the two industry monitors as the compliance manager and others as secondary administrators. . These standards recognize global corporate governance and require shared responsibility and leadership coordination. A hallmark of this model is the need for a set of rules, comparison machines, and risk engines powered by cutting edge technology, which may be necessary to ensure the technical performance of a large, custom organization. It is these characteristics that once reduce the risk.

While FTX believes this model can be developed by existing CFTC and SEC bodies, there may be other inconsistencies, including the management and disclosure of certain types of crypto assets. The purpose may be changed from time to time, but in all cases it meets the CEA definition of the product. While some of these tokens are considered safe, the existing terms do not clearly indicate the distribution of other tokens, so developers need to establish more details and more public bases for specialized assets. However, the main principle of FTX is to reconsider that all tokens and derivatives can be traded on the same platform and under the same rules, and have a shared tool that manages all industries inside. money users. Risks associated with the activities. for

Fourth, eligible encrypted ass in stores in stores in stores of stores and let's clearly contain mixed conversations. FTX focuses that US market of US controls has the power to fit the current business model, but CFTP and sin system is not a business model. The owner and the worker of the name fastures market and work is included in the CFTC and CFTP status. The system provides business data that workers in the business provides large functions, and to prevent enough business, and financial work This is a special quality. You can respond to new businesses from providing the transaction for CFTP and Platforms to work, and change the platform process, promptly.

Therefore

FTX would like to thank the team for providing the opportunity to share information about the heritage of the digital ecosystem and for advocating to continue to benefit the industry and deliver on its promise responsibly. for

FTX believes that most or most of the products and tools provided by the platform can continue to be shipped to the United States under current consumer control, despite some restrictions. correct or explain the results carefully. We believe that the new rules affecting the digital asset trading industry and the FTX industry must adhere to the best practices already in place, and our commitment to the coin is stable and trade oversight is also based on these assumptions. In this way, FTX believes that by combining the best of financial and digital assets, consumers will continue to use this proven tool for financial security. . All of this is centralized and through a single low risk platform.

Additional Notes

stable financial performance

Note: As regulators around the world continue to decide whether or not to manage several aspects of the digital ecosystem, we believe it is important to share our views on leadership, accountability and consideration for management. This statement is not a statement on, and it is not a legal interpretation of the current rules surrounding the fixed room, and it is not a recommendation for the use of a business or stable property. This article explores new legal rules for fixed parts that aim to meet the importance of regulatory value and maintain key characteristics.

About the context of stable financial management

As the cryptocurrency industry grows, it is important to have good governance in place and to grow accordingly. In this way, the cryptocurrency industry will honestly fulfill its responsibility to protect consumers, focus, and prevent fraud while enabling innovation and growth.

Stablecoins play an important role in the cryptocurrency ecosystem, and most cryptocurrency markets are determined by fixed income, making it one of the most promising financial institutions. At present, it is not known in which stable management system will ultimately be placed.

What are the stable results?

Let's start with the key questions. Anyway, what is a stable currency?

There are many stablecoins that are used in the cryptocurrency ecosystem. For example, this article assumes that the US dollar is a stable currency, but in fact has the value of the euro, British pound, and other currencies. Suppose the exchange rate is 1: 1. In other words, 1 token is 1 US dollar. The symbolic symbol stock is also believed to be STBC.

In this sense, the real STBC stable coin is a legacy blockchain that can be exchanged for US dollars. This can generally be accomplished through the following procedures and plans:

Reserves: Generally, stablecoins are fetched from one or more US dollars or other assets. These assets are usually held by banks on behalf of a brokerage, broker or other similar entity. The dollar value of these assets must be at least a fixed income.

Tokens: STBC is a blockchain-based token, with a token representing $ 1 (supported in the design / use process as described below). These tokens can be provided by private companies, intermediary banks or decentralized contracts.

Creation / Benefit: To generate 1 STBC token, eligible users must deposit 1 USD into the account. In recovery, the contract issues and returns 1 new STBC token to the user.

Likewise, eligible users can trade 1 USD by returning 1 STBC token to the contract. The contract destroys the token and returns $ 1 to the user.

What are the advantages of Stabilitycoins?

We believe that Stabilitycoins are one of the most important innovations in the cryptocurrency industry.

Say you want to send a friend $ 20. What are your options?

a) You and your friends might want to use the same P2P money transfer app (like Venmo).

b) You can send a transfer of $ 20 to a friend. It takes a day and can cost $ 5 or more, and international exchanges can take up to a week and cost more.

c) If you and your friend both have bank dollars, you can send $ 20 through ACH. The return will not be fully resolved in a few months and the return will face "risk of return".

d) You go to an ATM, deduct $ 23, pay $ 3, give a friend $ 20, and they have to find a way to use the US dollar card.

e) You can send 20 STBCs to your friend's cryptocurrency wallet, and if you are using a well-functioning blockchain (or both parties are using the same exchange), the remittance will arrive within a minute and the rate of exchange rate is only 1 cent. To do. .

Option (e) provides an example that proves that a stable coin is a good way to send money.

Let's take a step further from our actual app data and assume that users want to build blockchain apps. How do app users store and retrieve resources?

Today, consumers are faced with the same options and capabilities as before, and stablecoins have become the cheapest, safest, and fastest way.

What are the risks of Stabilitycoins?

There are three major risks associated with fixed income securities.

Risk of changes in reserves

Assets may be depreciated in US dollars if the fixed income is supported by non-US funds in a bank. For example, use a $ 1,000,000 SPY ETF (S & P500) to issue 1,000,000 tokens to support a stable coin, and if the market value drops 5%, you only have $ 950,000 to support 1,000,000 stable funds. . The "Stable" tokens were depreciated, at least at the time of redemption!

Unlike capital goods where consumers benefit from the return on investment, the value of fixed assets usually does not exceed $ 1. Consumers can do more for every dollar. This means that the key concept of asset recovery should focus on very weak assets, like the US dollar. US Treasuries can be a good asset for securities. The risk of supporting 100 stablecoins with $ 101 BTC is incredible. In contrast, a stable 100 share support with $ 400 BTC is more protective. This is because the risk of volatility of 75% is low before foreign exchange reserves have the opportunity to reduce the risk. A stable financial expert or designer should have a risk-free and transparent model to minimize the volatility of their capital and determine which assets are worth their money.

Dangerous refunds

There are still concerns. A user can have 1,000 STBC in hand, use an STBC debit card, and then be denied.

It happens when real expectations drop in dollars. There is therefore nothing to reimburse STBC. This means that your foreign currency is not the US dollar and that it has been depreciated.

Or, it can happen if the supplier decides to block your buyout. A higher grade can be kept for STBC.

In either case, the inability to trade (or the lack of clarity in the exchange process and policies) puts users at risk.

financial harassment

The ultimate risk of fixed coins is that they can be used for financial crime or fraud.

Every issuer or creator of a permanent coin must have procedures in place for the creation, redemption and implementation of laws to combat and prevent such use.

What is the necessary Stabilitycoin management framework? for

As mentioned above, we believe that stablecoins can transform the payments industry and come back by broadcasting favorable events around the world. Stablecoins will transform all payment markets in the future, reduce friction and exchange rates, and provide a reliable and profitable exchange rate channel to customers around the world. Therefore, we ensure that the main focus of the discussion is on the degree of security management in place, including availability, reliability, visibility, consumer protection and safety, identification and assessment and prevention of financial fraud.

We look forward to communicating with admins what the framework will look like. There are many ways, and we welcome feedback from regulators and others involved in the crypto industry, and welcome such involvement.

As mentioned above, stable coins come with real risks and must be built to build a base that can reduce those risks.

So, while we look forward to further discussions on content, we will support the recommendations for transparency and registration of fixed funds.

The requested frame can be:

a) Stablecoins must be provided to US users under the supervision of one or more regulatory bodies in the United States and must be registered on the “Regulated Stablecoins” list.

b) The registration itself is subject to notice and disclosure with notice and disclosure, specifying responsibility for data collection, reporting and inspection deadlines. The governing body has approved the plan to reserve the right to withdraw fixed part certificates.

c) The record includes the publication of daily archives showing the total value of term deposits, divided into a number in a category, such as "XYZ Bank 100 USD, US Treasury Bills 95 USD, US company level 1 US $ 50 for business card, US $ 30 for superior European commercial paper, [other assets permitted by laws and registered registration documents] US $ 10 ")

d) Suppliers must maintain sufficient “design”. This can be achieved by reducing the cost of various types of storage. For example, in an FDIC insured bank account, the interest rate against the US dollar would be 0.10%. 15% off Euros, 20% off British Pounds, Japanese Yen, Swiss Francs, Canadian Dollars, Australian Dollars, Singapore Dollars, Hong Kong Dollars, etc. and 50% off Bitcoin.

e) In order to identify the representative of the archives, the financial institution carries out an inspection every 6 months.

f) Stablecoins must have a clear and transparent payment requirement (i.e. based on knowledge of the consumer's information). There must be a process for resolving consumer grievances in the event of denial.

g) In the event of a financial breach, all registered permanent coins must be entered in the public register and the design and redemption process must be completed to ensure that the stable coin has been involved in the breach (by the chain analysis and monitoring equipment, the pattern found by the blockchain monitoring software process) is not reversible. for

As mentioned above, this is the basis for explaining the key elements of stable recording capacity. Each of these branches is designed to address management issues that must be addressed when protecting a viable fund. If designed correctly, this framework can improve the end result of a stable investment. We look forward to communicating with policymakers, executives and business partners on these topics.