A VISA Stablecoin? – The BIS is Worried! 😬

We meet again – Happy Friday, and welcome to your one-stop shop for all the latest and greatest RWA and tokenization news.

Let’s see what’s cooking in the tokenization kitchen this week!

🎯🔥 Rapid Fire Takeaways:

🦄 Uniswap Labs partnership brings institutional access to DeFi

🧐 Bank of Korea, BIS concerned Visa, Mastercard might launch stablecoins

🤑 Republic to List Profit-Sharing Digital Security Token on INX Next Week

🌱 Societe Generale-FORGE Unveils Pioneering Report on Carbon Footprint of Security Tokens

💰 Wormhole garners whopping $2.5B valuation as new unit emerges

🔌 DEPIN AND RWA – WHAT’S THE CONNECTION?

Some dishes are just better when served fresh, so let’s dig in and savor the flavor. 🍽️ 👇

🤝👣 Partners Mean Progress

Lines are being drawn, and alliances are being formed in this Game of Thrones Tokenization we’re experiencing. Uniswap Labs, a DeFi exchange, has partnered with Talos, an institutional investing firm, to bring DeFi to institutions. They’ll use Fireblocks, one of the most popular digital asset custody solutions, to make it all happen, and we don’t think they’ll be swapping just meme coins using this infrastructure. 

Neither will Japan’s SBI, who recently partnered with Circle to expand the use of stablecoins in Japan. Circle was kicking the idea around earlier this year when the Japanese government passed legislation clarifying its stance on stablecoins. SBI’s application reflects a desire to issue foreign stablecoins, specifically, an interesting move given CBOE’s recent investment into the Osaka Digital Exchange. 

👀👍 Regulators Cautiously Optimistic 

We’ve yet to see hardline fanfare or fury from global regulators regarding tokenization – a good thing given its nascent stage. That hasn’t stopped the Bank of International Settlements from finger-waving Visa and Mastercard over potentially launching a stablecoin. Reminder that global stablecoin volume recently passed Visa’s transaction volume (shout out to Nic Carter for the legwork here.) 

For his part, BIS head Agustin Carstens called for a “quantum leap” in banking, where blockchain “would allow us to build a financial system centered on the individual.” His counterparty, Cecilia Skingsley, might agree – she recently revealed that the BIS is exploring tokenizing its promissory notes. With over $115 billion in funding commitments, that’s a lot of tokenization. 

The British agree, with UK regulators welcoming a tokenized fund proposal put forth by industry leaders. While not blazing a new trail, the move suggests that Britain isn’t far behind its mainland counterparts regarding digital asset legislation. 

Further afield, the Hong Kong Monetary Authority has issued a glowing review of its recent tokenized bond initiative. It claims that tokenization reduced borrowing costs, relative to the bond's par value, by 0.78% and underwriting fees by 0.22%. Liquidity also improved by 5.3% thanks to retail investor access. 

Overall positive news from regulators this week – let’s keep the trend going! 

🚀💰 Advancement and Valuations

We see bigger numbers weekly, but this one will take a lot of work to beat! Wormhole has courted a whopping $225 million in their recent capital raise, clocking in at a cool $2.5B valuation. They completed the round on the back of their new product development-focused arm, Wormhole Labs. This is the same Wormhole blindsided by a $321 million hack in 2022, and they’ve been working meticulously on their security measures ever since. 

Remember the Republic Note from last Friday? If not, no worries – it’s called the R/Note, it’s on Avalanche, and it’s a tokenized security that distributed dividends from Republic’s portfolio exits. More news on this development: The R/Note will live on INX this coming week, so be ready! The company has $2.6 billion spread across private companies, so it’s your chance to get a slice of the action.

🌱⛅  Tokens Nurturing Nature

There’s a trope in finance, traditional and decentralized, about being disconnected from the real-world impact of our activities. Thankfully, that’s starting to change.

The InterWork Alliance is helping to push back against this stereotype with their Carbon Emission Token (CET) Protocol at COP28. Rather than tracking assets, this protocol tracks carbon liabilities for companies by leveraging the Hedera ledger, helping companies track their Scope 1, 2, and 3 emissions. 

Meanwhile, Societe Generale-FORGE released a new report on the carbon footprint of security tokens, revealing that a tokenized bond yields around 0.82kg of CO2, or the equivalent of a short 3.2 km car ride. While not perfect, this is a 99% energy consumption improvement for Ethereum since its recent network upgrade. 

Learning how to calculate your emissions is the best starting point. That’s why New Look is working with blockchain startup TrusTrace for sustainability traceability, aiming for a significant 46% reduction in emissions by 2030. 

Tokenization is once again making an impact where it counts. 

🧩🤔 Whose RWA is it Anyway?

This industry loves acronyms – real-world assets (RWAs), traditional finance (TradFi), and decentralized exchanges (DEXs) are just a few examples. A recent acronym, DePIN, has entered the narrative.

Short for Decentralized Physical Infrastructure Networks, DePINs stand on the shoulders of the Internet of Things (IoT) movement. The concept uses blockchain in tandem with advanced technologies like RFID and smart devices to track the network topography of device or product interactions more accurately, rewarding users, decentralizing financing and management, and significantly reducing barriers to access.

DePINs and RWAs are like cousins. They’re handy to know about and call on occasionally, but we won’t be seeing them weekly. 

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$225 million is nothing to shake a stick at – is this the start of a fire or a flash in the pan? 

Let us know your thoughts on Twitter or LinkedIn, and check out the RWA World Database – the full ESG Report is now live, and we analyze 20+ projects working in ESG, carbon credits, agriculture, energy, and beyond.