🚀 45 Institutions Collab on Canton as Tokenization Takes Off

Regular readers might already have a short list of major institutional tokenization pilots – there are more than a handful of ongoing experiments.📋🔬

The latest Canton initiative takes the cake – most of the names on your list are likely involved. 🎂

🎯🔥 Rapid Fire Takeaways:

🤝 Goldman, BNY Mellon, 45 institutions in Canton Network DLT interoperability trial for RWA tokenization

🤖 Derivatives sector ranks tokenization of collateral above AI

🏛️ ex-BNY Mellon tokenization lead joins European Central Bank

🦅 FDIC Vice Chair Calls for Crypto Regulatory Clarity, Says Tokenization Enables ‘Far-Reaching’ New Functions

💹 Bitcoin price rally sparks record ETF inflows of over $1B

👍 UK regulator green lights crypto ETNs for institutional investors

💽 Hong Kong invites applications for retail CBDC phase 2

With regulations shifting, we’re gearing up for the next wave of asymmetrical global financial flows. 🌊

We know which swell to catch, so let’s dive in! 🏄

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❗ New all-time highs are here. Are your digital assets safe?

Learn from Consensys, Hacken, DTCC, QualitaX, and more as we cover the Enterprise Ethereum Alliance’s DeFi Risk Assessment Guidelines – happening Thursday, March 28th, 1-4 pm GMT. 

Use promo code “RWAWorld” at checkout for a 10% discount! 

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🕴️ Big Names, New Trial

From Singapore’s Project Guardian to JP Morgan’s Onyx, institutional approaches to tokenized settlement layers continue to evolve. Citi now uses Avalanche for private equity, while WisdomTree has gone all-in on tokenization. Through it all, interoperability remains the holy grail. 🏆

These initiatives are:

• Lengthy, often taking years 🧓

• Expensive, often costing tens of millions of dollars 💰

• Deeply technical, involving many stakeholders 💾+📜

• Crucial to undertake before we start ripping the old wiring out of the financial system! 🔌❗ 

Canton, a public blockchain network focused on RWA tokenization, is supported by 45 institutions, including BNY Melon, Goldman, Nomura, and Paxos. It’s the latest initiative set to tackle the challenge. 🏉

But.. this isn’t the first time TradFi and DeFi have tried to find viable ways to tango. 👀

Compound Prime and Aave Arc attempted to create compliant, DeFi-centric products to offer through regulated financial channels back in 2022. The story is fascinating – rising rates, DeFi hacks, and market uncertainty cut these aspirations short. ⚰️

And Canton is much further along – it’s been two years, and the reality on the ground has changed. We’re bullish, but remember that it’s too early in the tokenization race to have foregone conclusions! 🕝

🗺️ Two Regions, One Dynamic

The US and EU are generally moving in tandem, but tokenization has introduced some discrepancies that offer serious potential opportunities. Stateside, SAB121 is on the chopping block and poised to claw back the billions of dollars in digital assets currently custodied with EU banks. ⚔️

This development doesn’t mean sparks are flying between the global regions – they’re still too similar to tease apart relative to other parts of the world. 🧬

However, the implications are hard to overstate – US banks positioned to accommodate these redomiciled funds will undoubtedly see a huge boon to their coffers. There’s a 1:350 ratio between US and EU banks regarding digital assets custodied. ⚖️

The question is… which US banks are best positioned to absorb these inflows and take the majority of the upcoming pie? 🥧

EU Corner 🤺

Europe isn’t giving up its role as global digital asset custodian without a fight. The European Central Bank recently welcomed Benjamin Duve, ex-BNY Mellon tokenization lead, to the ECB as their new Lead Market Infrastructure Expert. 👋

The timing isn’t too surprising either. Europe has meticulously worked towards more comprehensive digital asset legislation similar to Germany’s Future Financing Act to close the continent’s ongoing technology gap. 🎓

It’s also a multi-pronged effort, with the European Banking Authority recently taking steps to finalize its stablecoin policy. With new stablecoin issuance beating out the blockbuster Bitcoin ETF inflows, it’s crucial to set some standards even if your jurisdiction prefers tokenized deposits… after all, look what broad brush strokes like SAB121 end up doing. 🤔

US Corner 🥊

But the United States seems dead-set on turning the tides. 🌊

Not letting themselves be outdone by the Old World, the Yankees also doodled a new stablecoin bill. Republican Senator Lummis and Democrat Senator Gillibrand are working across party lines to achieve consensus – there’s hope for bipartisanship yet. 🙌

The CFTC also fired off a tactical strike of a digital asset taxonomy – its comprehensive, sleek, and clearly defines digital assets and stablecoins just in time for the new bill. With The Federal Reserve’s Powell saying a CBDC isn’t happening any time soon, it seems the cogs of Washington have begun to turn in lockstep. ⚙️

Oh, and we can’t leave out the FDIC Vice Chair, who called for regulatory clarity in crypto, citing tokenization as offering “far-reaching new functions.”  Many of these topics have been in the works for a while now, so is it really the Bitcoin ETF in the driver’s seat? 💺

Globally? …yes.

📜 Exchange Traded Bonanza

The recently achieved all-time highs for Bitcoin have ushered in a new wave of speculative ETF positions. Record inflows of nearly $1 billion were recorded in BlackRock’s iShares Bitcoin Trust (IBIT), which now tops around $15 billion in total AUM at the time of writing. 📊

A lot of jurisdictions are now thinking: “What about us?” as they slowly open their populaces to greater digital asset exposure. The UK recently approved a Bitcoin exchange-traded note (ETN), officially securitizing the asset. 🦁

Spin the globe half a turn, and Thailand has more pressure on the brakes. They’ve opened channels for institutions and ultra-high-net-worth individuals to invest in crypto ETFs but have left retail exposure on the shelf for now. 🐘

👁️ Mind The Trend! 

It may be in our name, but we’re not biased toward the tokenization of real-world assets. We just watch the trends and have a good handle on the direction all this is heading. 👉

Derivatives markets, which boast some of the world's most complex and astute configurations, agree. Tokenization ranked almost twice as high as AI in terms of its impact on derivatives! 🤯

So… you’ll want to be prepared. 😉

Make sure to join us on Thursday, March 28th, from 1-4 pm GMT as we cover the Enterprise Ethereum Alliance’s DeFi Risk Assessment Guidelines. 🔒

We also had a fantastic conversation with the Chateau Finance team about tokenizing fund exposure – you should check that out, too. 🎧