Archax, Algorand to Develop DeFi Products Together
The decentralized finance market (DeFi), which is booming, has led to digital exchange Archax inking a partnership agreement with Algorand, a blockchain developer, to create new smart financial products.
This was only one week after Archax had been granted permission by the United Kingdom’s Financial Conduct Authority to legally operate in the country as a digital securities exchange or custodian.
The exchange has yet to begin operations. Finance Magnates was also informed by the press release that Archax will trade the products they have developed together.
The Archax CEO Graham Rodford stated that although we are a blockchain-agnostic market, he is keen to partner with top providers to bring the next generation of innovative regulated financial products to market.
“Algorand fits that bill perfectly, and we are now working with them on a number of challenger products – such as smart stablecoins and liquid alternative instruments, as well as those which will revolutionize the lending/borrowing/staking space.”
He also stated that the new products would bridge the gap between the ‘centralized’ and ‘decentralized’ finance worlds.
Could It Overthrow Ethereum’s Dominance In DeFi?
Algorand developed the next-generation blockchain based on proof-of-stake consensus. This solves scaling and speed challenges. A significant amount of tokens from leading stablecoins such as USDC and Tether were also transferred to Algorand.
W. Sean Ford, Algorand’s COO, stated that Archax has the potential to leverage technology specifically designed for DeFi. He also believes that Archax will become one of the most prominent digital asset venues in the globe.
“By combining Algorand’s proven performance with Archax’s unique regulated status, institutional experience and regulatory status, we are looking forward delivering powerful products which will revolutionize how global financial markets operate in a new, frictionless economic system.”
Is there a global CBDC’ arms race in a developing (cryptocurrency) war?
Japan could also be exploring a digital currency to prepare for a future digital arms race that could lead to a (cryptocurrency) war.
It would be a great opportunity for China, or any other country, to become the first to develop a CBDC, and to incentivize its use on global markets. Many countries are already considering the development of a CBDC.
Joel Edgerton, bitFlyer’s CEO, stated to Finance Magnates, “If China’s CBDC becomes preferred for transactions in Asia, and globally, Japan could lose economic opportunities, and prestige.”
John Deacon, Financial Services Lead at Dragon cybersecurity and cryptography company, said that there was likely to be some first-mover advantage in this space, just like with existing cryptocurrencies.
“With China’s launch of the digital Yuan, it has the potential to be a currency arms race for maximum adoption. The prize is increased CBDCs in central banks reserves and international trade.”
Joel Edgerton stated that this could have significant ramifications. For example, “carrying the point to an extreme, Japanese CBDC would be difficult to sustain their huge debt load with domestic investors.
“This could result in a situation similar as Greece’s during the financial crisis. A government with low interest rates suddenly has to borrow from a market that is no longer willing to provide cheap funds.