Traders have begun unwrapping tokenized bitcoins. The U.S. Treasury Department will keep a vigilant eye on digital innovations. And trading volumes on OKEx have plummeted.
Ripple Chief Technology Officer David Schwartz tweeted the community could force the burning of billions of the protocol’s XRP native tokens held in escrow to prevent the drop in price that would likely occur should those billions in frozen tokens ever flood the market. On Dec. 2 a Twitter user asked the CTO, “If Nodes, validators and the community at large got together and we agree that it’s better for the community to burn the 50 billion XRP Ripple has in escrows, would that be possible?” Responding to the tweet, David Schwartz implied that majority rule would win in such a decision.
Innovation or risk?
The U.S. Department of the Treasury wants state and federal regulators to keep a vigilant watch on digital asset innovation, which could upset the balance of the current financial system. According to a report released on Thursday by the Financial Stability Oversight Council, digital assets are a “particularly good example” of both benefits and potential risks associated with innovation. The report highlighted the ambitions by nations around the world in their experiments with central bank digital currencies (CBDC) as a way to “enhance the global standing of their own currencies and enable faster payments.”
Wrapped bitcoin, the bitcoin-backed token on Ethereum now worth over $2 billion, has seen an increase in burns (or “unwrappings”) by some of its largest users as the Ethereum-based decentralized finance sector continues to cool. BitGo clients including Three Arrows Capital and Alameda Research are exchanging an increasing amount of their tokenized bitcoins minted earlier this year for real bitcoins as the bullish cryptocurrency market continues to center on bitcoin and Ethereum’s decentralized finance takes a back seat for now. In…