Stablecoins and Asset Management.

The 54th Annual Meeting of World Economic Forum at Davos, brought together experts in Blockchain-based financing. The panel discussion, sponsored by the The Hashgraph Association , explored the dynamic landscape of Regulated Stablecoins and Asset Management, featuring key figures shaping the industry under the theme On-Chain (Blockchain) financing.

The panel boasted a stellar lineup of thought leaders like Basak Toprak - EMEA Head Coin Systems, JP Morgan Onyx, a driving force behind innovation in JPM coin systems, Programmable Payments, Partior and CBDCs,? Duncan Moir - Sr. Investment Manager Alternatives, abrdn, - an expert in alternative investments, providing a unique perspective, Kannan Ramasamy - Executive Chairman, Vayana, representing Vayana’s Emerging Tech Platforms Division, Toni Caradonna - Partner, Blockchain Trust Solutions, a partner at the forefront of establishing trust in blockchain applications and Greg Scullard - Executive Director EMEA, Swirlds Labs, the moderator guiding the discourse with insights.

It was observed that regulated stablecoins have already carved a niche in the market, particularly within asset classes such as cash and money market funds. The next frontier on the horizon appears to be Corporate Bonds. The discussion then pivoted when Vayana introduced the potential inclusion of other Real-World Assets (RWAs), exemplified by B2B Trade Finance and various credit products, into the realm of Regulated Stablecoins and Central Bank Digital Currencies (CBDCs).

A noteworthy dialogue ensued, delving into the opportunities and constraints of integrating Public and Private blockchains into the expanding array of asset classes. The panel asserted that these blockchains are not only compatible but will harmoniously coexist, facilitating the configuration and deployment of productive use cases for clients. Striking a balance between permissionless and permissioned features becomes imperative, melding access to liquidity providers with the data privacy requirements of participating nodes.

Shifting focus to the growth of Regulated Stablecoins in Asset Management, Vayana presented data points highlighting the significant potential of B2B Trade Credit in the Asia-Pacific (APAC) region. With continued favorable demographics and infrastructure upgrades, APAC has garnered substantial attention from Private Equity, amassing an Assets Under Management (AUM) of $2.9 trillion in 2023. Despite being twice the size of Europe and half that of the US, the Private Equity to Private Credit ratio of 30 in APAC, compared to 5 in the US and 3 in Europe, signals a notable gap poised for transformation. Another propellant is the projected GDP growth, anticipated to be 2% higher annually than the US and Europe over the next 3 to 5 years.

In conclusion, the panel aligned on the prospect that, asset classes utilizing Regulated Stablecoins as a source of liquidity are well-poised for growth. This optimism is founded on the anticipation of emerging productive use cases for Real-World Assets (RWA) and the robust support from the financial ecosystem, including custodians, brokers, exchanges, and marketplaces, facilitating its widespread distribution.