OUSD: the promise and peril of scale
plus: bleak BTC, strong jobs, tech fumbles and more
“Civilization advances by extending the number of important operations which we can perform without thinking about them.” – Alfred North Whitehead ||
Hello everyone! I hope you’re all taking care of yourselves. Welcome to July.
Apologies for the late send today, a ton to get through this morning.
Production note: this newsletter will be taking a break on Friday.
PUBLISHED IN PARTNERSHIP WITH: ✨ ALLIUM ✨
A large share of onchain stablecoin movement is automated or internal: market-maker rebalancing, exchange sweeps, looping through smart contracts, and wallets shuffling funds between their own addresses. Counting all of it overstates how much real sending and spending happens.
Would you like to know how much of stablecoin volume is real?
→ Book a demo: https://www.allium.so/
IN THIS NEWSLETTER
OUSD: the promise and peril of scale
Macro: Jobs warming up?
Markets: bleak BTC vibe
Crypto is Macro Now offers ~daily commentary and updates on the overlap between the crypto and macro landscapes. Plus links and more.
If you’re a premium subscriber, thank you so much!! ❤
WHAT I’M WATCHING:
Podcast: Monetary Forces
I hope you’ll all forgive my tech mess-up in yesterday’s livestream – I stupidly assumed Izabella’s audio wasn’t working, when it turns out my mic/earbuds were the problem. You’d think that by now I’d have a better grasp of this. Apologies to all, and I promise to make different mistakes next time.
That aside, it was fun to chat with Izabella, as always – we covered other-currency stablecoins, FX swaps, and the “moneyness” of stablecoins, based on a paper by Yesha Yadav, Chris Odinet and Andrea Tosato.
You can catch the playback (and my fumbles) here.
OUSD: the promise and peril of scale
In the unfolding drama that is monetary innovation, a new cast member has entered stage left. He exudes plenty of main-character energy: well-dressed, with heft and aura. You could almost hear the collective gasp from the audience.
But a few minutes in, it became clear this new personality didn’t have much of a script. We find out his name and we gather he means to be important, but his lines are as yet unformed, his motivation unclear, and his outline lacks structure. Suspense can be thrilling, though, and we can assume character development will come later, along with some plot twists. Still, there’s a feeling of deflation, of unmet expectations and of a missed opportunity.
Ok, perhaps that’s too theatrical a metaphor for what is ultimately an announcement about stablecoin infrastructure. But you’ll see what I mean.
Yesterday, we heard for the first time from Open Standard, a new stablecoin initiative led by Zach Abrams, co-founder and CEO of Bridge, the stablecoin platform acquired by Stripe last year for $1 billion.
Open Standard is launching a stablecoin OUSD, and it has over 140 partners already signed up to use it.
The list is a who’s who of tech and finance: Stripe, Visa, Mastercard, Amex, Google, Shopify, BNY, BlackRock, Standard Chartered, Mercado Libre, DoorDash, Aave, Coinbase and I could go on and on. The distribution power imbedded in this list is massive.
It also includes some hefty European payments companies (Adyen, Klarna and others) which will send chills through the halls of the European Central Bank, already panicked about the potential demand for dollar stablecoins. But I digress…
Beyond the collection of names, we’re not told much more. Indeed, the partner list takes up more word-count than information about the project itself.
We are, however, given vague hints at three “design principles”. I’ll list them and highlight the frustrating lack of detail – but then I’ll suppress my irritation at what Omid Malekan calls “Proof of Press Release” and speculate on why this initiative could change the shape of the industry, as well as how it could fail.
