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  • 😬 RWAs Fake News!? Nuance or Naysaying?

😬 RWAs Fake News!? Nuance or Naysaying?

RWA World Newsletter - Feb 9, 2024

Author

Ray Buckton
February 09, 2024

And US banks to soon custody crypto? 🤔

We might have to walk back last week's review after all! 🦅

🎯🔥 Rapid Fire Takeaways:

States are getting antsy, sustainability is getting tokenized, and the yen is on-chain. 🤹

We’re here for all of it, so let’s scope it out. 👀

🔍 Deep Value or Deepfake? 

Real World Asset Tokenization is Fake News – we can pack it up and head home, guys. 💼

Wait, wait, that was a joke! 🚪

There’s a bit more to get from Dave Hendricks’, CEO of Vertalo, recent article than that. 😉

Vertalo arose from a need more than an opportunity – they’ve been working on compliant enterprise tokenization since early 2017. 🧠

Only BlockApps boasts a longer history – we sat down with them in a fantastic Twitter Space to discuss their Mercata marketplace and how real-world asset tokenization has evolved since 2015! 🌱

We won’t pull back the curtain because you absolutely need to listen to the BlockApps team’s take on tokenization – they’re uniquely qualified to give a candid lay of the land. 🗺️

💴 Yen, Then

The lay of the land of the rising sun is bullish on tokenization, with tokenized Yen now available on the Injective blockchain a la Helix, a decentralized exchange. 💱

First time hearing about Injective? That’s why Chainlink’s CCIP is so crucial – blockchain interoperability is a must for effective tokenization. ✅

It’s also why some entities are sticking with good old-fashioned Ethereum for tokenized warrants. UBS did just that for a call warrant on Xiaomi stock, showing that they’re not scared to try new approaches to tokenization. 🔬

Recall that UBS helped to complete the world’s first cross-border digital bond transfer on a public blockchain, so they’re well-versed in tokenization at this point – experience is the antidote to fear, after all. 🎓

Meanwhile, WisdomTree, a Bitcoin ETF issuer, saw its CEO, Jonathan Steinberg, go all-in on tokenization. While some cited liquidity, transparency, and standardization, Steinberg offered a lucid take on the asset management flexibility associated with tokenization:

“One of the real advantages, I would say, will be around the user experience – and by that, I mean you’re going to get much greater control of your assets as opposed to the infrastructure that exists today – where your savings, your investments, and your payments are all connected much more closely. That kind of flexibility will prove to be, I think, of tremendous excitement to investors over time.”

That’s a future worth some excitement! 🚀

🤠 Reg Hustle or State Shuffle? 

This week, Staff Accounting Bulletin (SAB) 121 was ruled to require congressional approval – much-needed great news for digital assets in the United States. 👏

This legal directive makes it prohibitively expensive for banks to custody crypto. Silly rules like this are why Coinbase is the sole custodian for most  Bitcoin ETF holdings – oops. 😬

(SAB) 121’s evolving reversal is just the latest pile of hot garbage that’s come out of Gensler’s Cave to be ruled improper – given Gary’s track record, we’re shocked. 🙄

Many states are tired of the perceived overreach and are taking financial matters into their own hands with legislation explicitly barring CBDCs from their jurisdictions, with South Dakota being the latest to join the roster. ⛔

🌍 Global Gains With Tokenization

It may have ~50% of all tokenization initiatives in its jurisdiction, but the U.S. is only part of the world. 🧩

Germany has seen Neutral, a tokenized trading platform, partner with DLT Finance, a brokerage firm, to create a dedicated blockchain platform for carbon credits, renewable energy credits, and other sustainability products and initiatives. ♻️

Further southeast, the Saudi government has courted Hashgraph Association for a $50 million deal to launch a “DeepTech Venture Studio” to foster a greater fintech culture in the Kingdom. 🐪

Hong Kong is launching its second digital green bond initiative after a massively successful $100 million first round. This time, they’re going multi-currency, accepting HKD, RMB, USD, and EUR. 💱

Global governments are playing tokenization catch-up compared to some firms. CLS, which handles over $7 trillion in daily transactions in the FX markets, saw its first foray into distributed ledger tech in 2018. ⌚

Now, the move is paying dividends. DLT-based CLSNet’s volumes are up 61% year-over-year, jumping from $71 billion in 2022 to $115 in 2023. The dawn of tokenization is upon us. 🌄

…

So, is Dave right about tokenization? 🤔