Neil Mathew, Author at Cryptocoin Spy

A report from the International Money Fund highlighted the fact that bitcoin and other cryptocurrencies could actually affect global cybersecurity. Specifically, the report stated that the “rapid growth” of cryptocurrency assets could create “new vulnerabilities in the international financial system”. The report certainly comes at an interesting time, as both U.S. and U.K. lawmakers are pressuring their respective governments to create a more concrete and clear framework regarding cryptocurrency regulation.

This is not the first opinion offered by the International Money Fund. In fact, the Managing Director of the IMF and French lawyer/politician, Christine Lagarde, has referenced bitcoin and blockchain technology in general various times. Specifically, she has previously acknowledged that bitcoin could potentially lead to less of a demand for central banks in general, hinting that blockchain could be utilized in certain sectors such as lending and commodity trading. Although Lagarde has acknowledged the potential of blockchain technology, she has also been adamant that cryptocurrency has to be regulated in general, stating that its own technology could be used to regulate it. Ultimately, it is clear that the international organization is concerned about potential issues while still acknowledging that it can be a force in various financial sectors.

The International Monetary Fund was created in 1944 to help promote global financial stability and cooperation. It is widely considered one of the most important organizations with regards to exchange rates, international trade, and lending to its over 190 member countries. It has also played an integral role when it comes to advising and aiding developing nations, as well.

Many consider the IMF report a response to the fact that more financial institutions are considering utilizing blockchain-based products, such as XRapid, which many banks have signed on to use in the near future. This isn’t surprising, considering that Ripple as a company is looking to enter the global payments space, since blockchain technology allows for cross-border payments to be conducted quicker and more efficiently. Ripple Lab’s chief executive Brad Garlinghouse seems more than optimistic about XRapid’s potential, claiming that “dozens” of banks would be using it very soon. IBM has also recently announced a Stellar-based payment solution, as well.

Maker has been having some positive price movement, and recently doubled in price in less than a month, and now is worth well over $700. Part of this success is due to the fact that Maker is responsible for creating the Dai stablecoin, which has helped the MKR now become the most valuable ethereum token, surpassing OmiseGo.

Dai is an algorithmic stablecoin, and certainly gained attention for its resilience, especially during the bearish sentiment that has dominated most of 2018. It is pegged to a dollar but separates itself from other stablecoins in that Dai is actually created through a smart contract, and it requires a certain amount of ethereum for the contract to be fulfilled. As a result, many cryptocurrency enthusiasts consider Dai a true decentralized stablecoin, because unlike other stablecoins, there are no banks or financial institutions involved.

In addition, around 1% of all ETH in existence – 800,000 ETH – are now locked in DAI, to fulfill these smart contracts, and to ensure liquidity when it comes to Dai. There are some who criticize the decision and believe that can have a negative effect on the price of ethereum. Others believe that this is a smart move, and that this will help both ethereum, Maker, and Dai.

Dai is looking to not just exist as a stablecoin pegged to a dollar but is also looking to be utilized when it comes to commodities and assets. There are many who believe that Dai’s true value lies in the fact that it can be a major force in the decentralized lending sector, as well, although time will tell whether this comes to fruition. Regardless, the fact that 1% of ethereum is locked up in Dai is certainly a substantial move, and time will tell whether investors appreciate this fact or not. Either way, it certainly seems like Maker, and Dai, are developing nicely.