BitGo: Crypto Water Cooler — Oct 4
GM. It’s Wednesday, October 4.
Newsmakers
Tokenization and the Future of TradFi Markets
Tokenization — the creation of crypto tokens for non-crypto “reference” or “real-world” assets — has garnered lots of attention in 2023 and, with big TradFi firms such as the London Stock Exchange Group, UBS Asset Management, and ABN AMRO launching initiatives, it may be reaching critical mass . An industry discussion on this topic took place at last month’s Sibos financial services conference with plenty of TradFi institutions considering or creating tokenization roadmaps for financial products like money market funds, illiquid private markets, real estate, and so forth.
It has also caught the attention of regulators. The U.S. Federal Reserve Board (“Fed”) weighed in with an August 2023 paper. In Tokenization: Overview and Financial Stability Implications, the Fed finds that tokenization can offer investors inroads to markets that are costly or otherwise difficult to access. The use of smart contracts could create more liquid markets with better price transparency. Using tokens as collateral can facilitate lending, too, with more rapid settlements.
The Fed also sees risks. The tokenization market is currently in the low single-digit billions — not large enough to threaten financial stability. Should the numerous projects in development come to fruition, though, both the digital asset market and TradFi may have some new vulnerabilities because of the role tokenization plays in connecting the two. This is more likely, the paper indicates, when the reference asset is less liquid or illiquid — such as real estate. Volatility could also increase if investors decide to redeem reference assets at “fire sale” speed or due to differences in trading timing. Digital asset exchanges allow for 24/7 trading, but most reference asset markets have specific business hours.
That hasn’t stopped U.S. financial institutions from moving forward. JPMorgan Chase , the largest U.S. bank by assets, the leader in the space, is already processing more than $900B in short-term loans on its permissioned version (a blockchain that’s not publicly available for other users or purposes) of Ethereum. Tokenized assets on this platform include U.S. Treasurys and the blockchain bank account token, JPM Coin.
Citigroup, meanwhile, announced a tokenization service earlier this month that provides cash management and trade finance for its institutional clients with smart contracts providing the same functions as bank guarantees and letters of credit. Citi ran a test pilot with a canal authority and shipping company Maersk before launching.
Although TradFi institutions have preferred private blockchains, investment giant Franklin Templeton has gone directly to the public blockchain , offering the first U.S. registered mutual fund.
Read more →Federal Reserve Board
United Arab Emirates’ Investment in Regulation Pays Off
Can a clear regulatory framework help a country’s crypto industry grow? According to a new report from Chainalysis on crypto trends in the Middle East, it can, and the United Arab Emirates (UAE) is a shining example. Dubai, the country’s largest city, was a pioneer in embracing crypto and establishing a blockchain strategy in 2016. In 2018, capital city Abu Dhabi established the world’s first regulatory framework for cryptocurrency, the Abu Dhabi Global Market (ADGM). The establishment of the country’s Virtual Asset Regulatory Authority (VARA) in 2022 was also in the vanguard.
These efforts appear to be paying off. According to the Chainalysis report, Middle East & North Africa: Crypto Takes Hold as UAE Leads the Way in Promoting Regulatory Clarity, the UAE, a country of nine million people, has received an inflow of about $35B in on-chain value since June of 2022. As a whole, the Middle East and North Africa received approximately $390B in value between July of 2022 and June of 2023, representing 7.2% of global transaction volume during this time.
What makes the UAE stand out from other countries in the region is the comparatively high use of decentralized platforms and the large proportion of transactions by institutional investors.
Senior Manager for Public Policy at BitOasis Akos Erzse told Chainalysis that “There are distinct rulebooks for staking, broker-dealers, advisory services, custodians — this makes it easier for businesses to understand what the specific regulatory requirements are for providing certain services.” VARA is also responsive to the changing needs in this rapidly evolving landscape; for example, it recently made a change that allows staking of assets in custody. Erzse says the proactive approach has helped to attract DeFi entrepreneurs to the country.
Institutional investors like it, too; institutional investments greater than $1MM accounted for just over two-thirds of crypto transactions during the timeframe of the study. Transfers linked to “professional investments” in the amount of $10,000 to $1MM accounted for an additional 4.6 percent of transactions.
Elsewhere in the region, the report finds that Turkey, where crypto has long been popular as a way to combat skyrocketing inflation, dominates in terms of transaction volume, accounting for over $150B of this $390B figure.
Read more →Blockworks.co
Web3 Technologies for Travel and Hospitality Take Off
The multi-trillion dollar hospitality and travel industries have a reputation for being slow to incorporate new technology . But signs indicate that hotels, airlines, and booking companies are waking up to the possibilities of Web3. The ability to streamline services using new technology could have a big impact for the two billion-plus people expected to travel in 2024, making everything from booking a room to changing the name on a ticket easier. This past May, the first travel conference focusing on transitioning to Web3 was held in Barcelona, and companies are making moves in that direction.
Last week, Zurich-based Sleap.io , which closed a funding round in July, announced the Q1 2024 debut of their Web3 native hotel booking platform. It will feature reduced commissions and transaction fees; booking confirmations issued as NFTs; and personalized recommendations generated by artificial intelligence. Hotels and their partners will also have opportunities to offer real time customized offers. Sleap.io is built on Camino Network , an industry specific layer-1. Dozens of travel companies have already become validators on the blockchain and have a voice in the network’s governance.
Lufthansa Group , Europe’s second largest airline, is launching a Web3 rewards program on Polygon. Travelers will receive digital collector cards representing their trips; the cards can be traded or used to obtain rewards such as free airline miles, business lounge access, and frequent traveler status upgrades. Over 20,000 people participated in a trial with more than 150,000 cards distributed. Etihad Airlines , the UAE’s national airway, will allow travelers to stake NFTs in exchange for free miles, priority check-in, and lounge access.
Meanwhile, Lingo — advised by companies like Consensys, Expedia, Google, and Booking.com — has created a token holder club that provides more flexibility for awards to be used across providers. Lingo is backed with a growing portfolio of real estate properties to make it easier for participants to go on vacations.
Read more →CoinSpeaker
News In Brief
领英推荐
Regulation and Security
Business of Crypto
DeFi and Web3
Midweek Market Pulse
Total Market Cap: $1,081,103,066,924 –7 day change as of Tuesday 10/3/23 Noon EST: +3.8%
“Uptober ” is off and running as the start of Ethereum (ETH, +3.3%) futures ETF trading in the U.S. gave the industry a shot in the arm. Total crypto market cap climbed 3.8% to $1.08T.
The ETFs are listed on the Chicago Board Options Exchange (CBOE) and come from a variety of sponsors, including VanEck, Bitwise, ProShares, and Valkyrie. While volume was muted, according to The Wall Street Journal ($) , all of the ETFs combined for under $7MM in day one trading. Nonetheless, the listings mark a significant milestone, giving investors the ability to gain exposure to ETH through their brokerage for the first time. Several ETFs that invest in both Bitcoin (BTC, +4.2%) and Ethereum futures also launched. There is still a long list of applications for spot ETFs for both ETH and BTC awaiting a decision from the SEC.
Bitcoin may also have benefitted from the prospect of a federal government shutdown and because the U.S. government debt recently surpassed $33T — both of which serve as a reminder of its role as a store of value outside of the purview of U.S. governmental and monetary policy.
Solana (SOL, +25.7%) shook off concerns about the prospect of FTX selling a large amount of SOL as part of its bankruptcy proceedings to post a monster gain. A widely-followed analyst on X laid out the path for Solana to hit his price target of $250 . Meanwhile, Solana continues to receive inflows from institutional investors, leading CoinShares’ James Butterfill to call it the “most loved alt-coin this year .” Simultaneously, Solana’s TVL hit a 2023 high of nearly $340MM. Last month, it benefitted from news of Visa’s introduction of USDC settlement on the Solana blockchain. SOL has quietly been one of 2023’s major winners with a year to date gain of nearly 140%.
Lastly, Polygon (MATIC, +9.9%) was buoyed by news that Google Cloud is now a validator on the Polygon network.
The Last Word
Altcoin
Noun
: Any cryptocurrency other than Bitcoin
/ Altcoins differentiate themselves from BTC by adding novel capabilities and partnerships.
About BitGo
BitGo provides the most secure and scalable solutions for the digital asset economy, offering regulated custody, borrowing and lending, and core infrastructure to investors and builders alike.
Founded in 2013 — the early days of crypto — BitGo pioneered the multi-signature wallet and later built TSS to improve upon other companies’ MPC offerings. Between multi-sig and TSS, BitGo offers the safest technology on the market and safeguards over 600 tokens across a wide variety of blockchains.
Over the years, BitGo has expanded from offering wallets into providing a full-suite solution that lets clients hold assets safely and then put them to work.
BitGo launched BitGo Trust Company in 2018, providing fully regulated, qualified cold storage to complement BitGo Inc’s original hot wallet solution. In 2020, BitGo launched BitGo Prime, which allows its clients to trade, borrow, and lend. Moreover, BitGo also provides access to DeFi, staking, NFT wallets, and beyond, and serves as the world’s sole custodian for WBTC, or wrapped Bitcoin.
Today, BitGo is the leader in digital asset security, custody, and liquidity, providing the operational backbone for more than 1500 institutional clients in over 50 countries — a list that includes many regulated entities and the world’s top cryptocurrency exchanges and platforms. BitGo also processes approximately 20% of all global Bitcoin transactions by value.
For more information, please visit www.bitgo.com .
?2023 BitGo Inc. (collectively with its affiliates and subsidiaries, “BitGo”). All rights reserved. BitGo Trust Company, Inc., BitGo Inc., and BitGo Prime LLC are separately operated, wholly-owned subsidiaries of BitGo Holdings, Inc., a Delaware corporation headquartered in Palo Alto, CA. No legal, tax, investment, or other advice is provided by any BitGo entity. Please consult your legal/tax/investment professional for questions about your specific circumstances. Digital asset holdings involve a high degree of risk, and can fluctuate greatly on any given day. Accordingly, your digital asset holdings may be subject to large swings in value and may even become worthless. The information provided herein is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation. BitGo is not directing this information to any person in any jurisdiction where the publication or availability of the information is prohibited, by reason of that person’s citizenship, residence or otherwise.
Sr. Talent Acquisition Consultant III
1 年“Water belongs to everyone”
Sr. Talent Acquisition Consultant III
1 年“Water is a natural resource”