📍 [Analysis] Use regulated stablecoins, get censorship - Tong Sheng

Like it or not, regulation plays a large role in the adoption of crypto, according to Tony Sheng. Gemini and Paxos made headlines last week with their respective announcements of regulated U.S. dollar backed stablecoins, approved by the New York Department of Financial Services (NYDFS). These products will likely compete directly with Tether, a stablecoin project that has grown tremendously thanks to the need for a stable asset that can be used by traders and exchanges. Gemini and Paxos potentially have an advantage over existing stablecoins thanks to regulatory approval. After all, designing something that complies with regulation takes stringent engineering, but will likely appeal to large institutional investors. The downside for these products is they stray from the vision of uncensorable assets on the blockchain. In gaining the blessing of NYDFS both issuers will be required to comply with any government requests, including seizing a user’s assets. Gemini for example, specifically outlines the ability to 'pause, block, or reverse token transfers in response to a security incident or if legally obligated or compelled to do so by a court of law or other governmental body' in their whitepaper. It is therefore worth questioning if regulatory compliance requires removing the most important feature from a cryptocurrency, is it a cryptocurrency at all?