Improving Stablecoins with TapestryX NAL (Part2)

Multiple jurisdictions have written or are writing  regulations and laws for stablecoins. The primary  topics are: 

• The types of licensed institutions that can issue  them. 

• The type and control of the reserves that can back  them. 

• Customer protections under KYC or guarantees.

• Control and audit requirements. 

• Handling of interest on stablecoin reserves. • Future regulatory considerations. 

  Note: there are very few if any regulations related to  the underlying DLT that records and ‘accounts’ for  the stablecoin transactions. 

BIS Criticism of Stablecoins 

The BIS criticized stablecoins as a form of  money on three characteristics 

• Singleness of Money: This refers to the  principle that all forms of money in an  economy should be interchangeable at par  value 

  • Stablecoin values can be volatile 

• Elasticity of Money: Elasticity in this context  means the ability of the money supply to  expand or contract in response to economic  needs. 

  • Stablecoins are independent of central banks 

• Integrity of Money: Integrity refers to the  soundness, transparency, and trustworthiness  of the monetary system. 

  • Public blockchains are susceptible to corruption  and fraud

A B2B Stablecoin Network running TapestryX

Conclusions and Next Steps

• Stablecoins have a valid and commercially successful utility.

• However, they are functionally limited in supporting institutional or financing transactions.

• L4S Corp.’s TapestryX as a Network Accounting Ledger Technology (NAL) offers the means to:

• Facilitate a full functionality stablecoin payment and financing network

• That can be easily integrated with other digital assets and transactions.

• TapestryX’s capabilities will allow the prospective stablecoin new entrants to support and advance current stablecoin utility.

Click the button below to continue to Part 3, where we break down how TapestryX compares to traditional blockchain systems, highlight findings from the ISSA report, and explore the global regulatory landscape in more detail.

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