Cryptocurrency exchange Coinbase is acquiring a minority stake in Circle Internet Financial, dissolving their partnership and bringing the stablecoin USD Coin fully in-house, while also adding native support for USDC on six additional blockchains, bringing the total to 15.
The Digital Euro Association has acknowledged Ripple's partnership with Mastercard in the CBDC Partner Program, recognizing Ripple's efforts in building government-backed stablecoins and expressing excitement about their involvement.
Tokenization of real-world assets on the blockchain is rapidly gaining momentum, offering benefits such as transaction speed, liquidity, cost-savings, and round-the-clock access, with experts predicting it to become a $16 trillion industry by 2030. Over 70% of financial leaders expect to use tokenization in their businesses, with potential impacts on asset trading, real estate transactions, derivatives, and carbon markets. Tokenization unlocks liquidity, enhances security and data protection, reduces transaction costs, and enables programmability and automation, making it a key driver of digital asset adoption and a fundamental shift in business operations.
Tokenization has the potential to improve efficiency, liquidity, and transparency in bond markets, according to a report by the Hong Kong Monetary Authority (HKMA), following a successful $100 million tokenized green bond issuance in collaboration with the local government.
Summary: Coinbase and Circle have dissolved the Centre Consortium due to regulatory clarity issues surrounding stablecoins, with Coinbase taking an equity stake in Circle and Circle assuming enhanced responsibilities for the USD Coin (USDC) stablecoin; Binance.US partners with MoonPay to use Tether (USDT) as its new "base asset" for transactions, while Binance faces challenges with fiat withdrawals in Europe; Shopify now accepts USDC payments on its platform, and Solana Pay plans to add additional altcoins; China launches a blockchain-powered data exchange with over 300 participating enterprises.
Coinbase CEO Brian Armstrong shared ten emerging ideas in the cryptocurrency space that excite him, including the creation of a CPI-linked stablecoin, on-chain reputation systems, on-chain advertising, and decentralized labor markets.
Coinbase has launched a new crypto lending service for institutional clients, offering overcollateralization and secured loans in the wake of the bankruptcies of similar firms Genesis and BlockFi.
The Tokenized Asset Coalition (TAC) has been formed by seven leaders in decentralized finance (DeFi) to work towards the adoption of public blockchains, asset tokenization, and institutional DeFi, with the aim of creating a unified financial system on the blockchain.
Mirae Asset Securities, South Korea's largest financial group, is partnering with Ethereum scaling platform Polygon Labs to promote tokenization in finance and drive the adoption of Web3 technologies. Through the collaboration, Mirae aims to establish itself as a global leader in tokenized securities, bringing real-world assets onto the blockchain. Tokenization projects have already been initiated by other financial giants, and the industry is projected to grow significantly, reaching $16.1 trillion by 2030. The partnership is expected to accelerate the adoption of Web3 technologies in the financial sector and enhance interoperability with foreign financial systems.
Coinbase CEO Brian Armstrong discusses the company's base layer 2 blockchain network, interest in flatcoin, and the need for regulatory clarity in the crypto industry, suggesting that the courts, congress, and the CFTC could provide clarity and that there could be a new SEC chair in 2024.
The lack of clear crypto regulations in the US has caused significant issues for the industry, leading to collapses and a weakening of America's position as a financial hub, according to Coinbase CEO Brian Armstrong. He emphasizes the need for clear rules that recognize the innovation potential of the technology while protecting consumers. Armstrong also highlights the potential benefits of Bitcoin exchange-traded funds (ETFs) and Coinbase's role as custodian in many ETF applications.
The value of tokenized real world assets is expected to reach $16 trillion by 2030, with $3 billion in assets already tokenized, bringing efficiencies in payment and settlement and democratizing finance by making global investment opportunities more accessible to the general population through fractionalized investments.
The concentration of assets in decentralized finance (DeFi) could pose a risk if stablecoins surpass the market capitalization of the native tokens of their underlying blockchains, creating a potential for double-spending and control by token holders, highlighting the need to rethink distributed ledger technology (DLT) architecture and explore alternatives to blockchain such as directed acyclic graphs (DAG).
Citigroup has launched a digital token service called Citi Token Services, leveraging blockchain and smart contract technology to facilitate quick cross-border money transfers for institutional clients, and aims to streamline transactions by digitizing bank guarantees and letters of credit in the trade finance ecosystem.
Chainlink's LINK token has surged over 10% due to partnerships with traditional financial institutions, including a deal with SWIFT to scale tokenized asset adoption and a collaboration with Depository Trust and Clearing Corporation (DTCC) on Swift's Blockchain interoperability project, as well as ANZ's use of Chainlink's Cross-Chain Interoperability Protocol (CCIP) to complete a cross-chain purchase of tokenized assets with its stablecoin, A$DC.
Crypto asset manager CoinShares plans to establish a hedge fund unit for qualified US investors in order to provide institutional investors with actively managed exposure to digital assets outside of Europe due to the changing macro environment marked by interest rates and inflation.
The appetite for tokenizing real-world assets on blockchains is growing, with both financial incumbents and crypto native players getting involved, and smaller participants such as retail users and businesses are now able to access these assets for remittances, savings, and payments.
The Federal Reserve has released a paper discussing the benefits of tokenizing real-world assets on blockchains, stating that it has the potential to provide access to otherwise inaccessible markets and improve liquidity.
A prominent crypto venture capitalist names Bitcoin, Ethereum, Solana, Cosmos, and Celestia as the core blockchain networks in the digital asset space, each with its own defining characteristic.
Coinbase's blockchain, Base, has quickly become a major player in the Ethereum-based layer-2 chain space, hosting numerous decentralized projects and seeing a high volume of transactions and new addresses, with the goal of bringing a billion users on-chain within this decade. The company aims to drive mainstream adoption by reducing costs, improving user experience, and developing better identity infrastructure, and believes that blockchain technology is moving from a speculative phase to one focused on utility for everyday people.
Coinbase is leading a major lobbying effort in Washington D.C. to garner support for new regulations in the cryptocurrency industry.
Despite the prevalence of private blockchains in the banking sector, the co-founder of Chainlink predicts that public blockchain protocols will ultimately become the biggest market for banks' tokenized real-world assets, as they offer diversified collateral and attractive yields. However, financial institutions in the US may proceed with caution due to regulatory uncertainty. On the other hand, European and Asian banks are progressing in this area, with companies such as Citi and JPMorgan exploring tokenization on public blockchains like Ethereum. Franklin Templeton has also embraced public blockchains, recognizing their cost efficiency and rate of innovation. Interoperability and cross-border liquidity are key considerations for banks as they adopt tokenization and explore ways to move assets across chains.
Stablecoin issuer Circle Internet Financial has released Perimeter Protocol, an open-source smart contract codebase that allows for the development of tokenized credit markets, enabling various credit use cases such as invoice factoring, payroll advances, instant settlement, and credit trading for institutional investors. This move comes as the tokenization of real-world assets gains momentum, with tokenized assets predicted to grow to a $5 trillion market in the next five years. Circle aims to leverage the protocol to enhance the utility of its stablecoin USDC and Euro-pegged token EURC in decentralized finance (DeFi) credit platforms.
Coinbase CEO Brian Armstrong emphasizes the importance of the US establishing a regulatory framework for crypto assets, stating that it is a national security issue and that the country is falling behind other major economies in terms of regulatory clarity, resulting in a decline in the US job market share for the crypto industry.
Blockchain-based lending platform, OpenTrade, has launched a tokenized U.S. Treasury bill pool, allowing accredited investors and institutions to access yield through tokenized treasuries.
Tokenization, the process of converting asset ownership rights into digital tokens on a blockchain, is disrupting securitization and the financial markets, according to Jenny Johnson, CEO of Franklin Templeton. Johnson highlights the benefits of tokenization, such as enabling payment mechanisms and smart contracts, and cites examples of artists like Rihanna and athletes who can leverage tokenization to monetize their works and future revenue streams.
Blockchain technology is breathing new life into traditional assets as big finance firms invest in token trading and investment platforms, with more than a third of institutional investors in the U.S. and almost two-thirds of high-net-worth investors planning to invest in tokenized assets this year or next.
Tokenization, the process of linking assets to crypto tokens on a blockchain, is gaining prominence and attracting attention from regulators and financial firms as it offers investors access to previously inaccessible markets, improved liquidity, and greater efficiency, although it also introduces potential financial stability concerns and risks of transmitting shocks between crypto and traditional financial markets.
JP Morgan's blockchain division focuses primarily on tokenized forms of traditional financial instruments rather than cryptocurrencies, with a growing interest in bringing traditional assets onto the blockchain and exploring smart contracts for instantaneous exchange and collateralized borrowing against tokenized treasuries through its Ethereum-based private blockchain, Onyx.
Backed Finance has announced the launch of a tokenized government bond on the Base layer-2 network, with plans to expand its product offering by tokenizing other assets, such as equities and commodities.
Swiss tokenization firm Backed Finance has launched the first real-world asset token on Coinbase's Base blockchain, offering a blockchain-based version of BlackRock's short-term US Treasuries ETF, with a 5.25% annual yield, to qualified investors and licensed distributors.
