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😬 SEC Commissioner Worse Than Gensler?

RWA World Newsletter - Dec 13, 2024

Author

Ray Buckton
December 13, 2024

With SEC Chair Gary Gensler announcing his resignation from the agency, the collective digital asset industry breathed a sigh of relief. 💨

However, according to industry professionals like the Cedar Innovation Foundation, the upcoming vote regarding the SEC Commissioner poses a new threat to digital asset innovation in the United States. ⚡

🎯🔥 Rapid Fire Takeaways:

Current SEC Commissioner Caroline Crenshaw is up for reappointment, and the industry is concerned about her record of opposing the spot Bitcoin ETF and general anti-crypto sentiment. 🤨

Are we heading into a gilded age for tokenization and digital assets, or did we jump out of the frying pan and right into the fire? 🍳

🌌 Big Banks and Big Expansions

Regardless of our position on the regulatory cooktop, banks and corporations are adopting tokenization solutions like there’s no tomorrow. 21X made history by securing an EU license for the first fully regulated blockchain-based trading venue, while Germany’s DZ Bank is piloting its first retail-focused crypto offering. Asia is also on the radar, with Crypto.com working with Deutsche Bank to expand in the region. 🌐

Sentiment is also high overall. JP Morgan called November a “monumental” month for crypto, while Citi claimed that crypto markets benefited from an overall positive environment since the US election that same month. Both entities recently completed tokenization settlement trials, so they’re doing more than paying lip service to tokenized assets. 💋

With all these good feelings, it’s no wonder that, according to Chainalaysis, over 400 million crypto wallets now have a non-zero balance. This data led Bitwise to predict that 2025 will be the “Year of the Crypto IPO,” likely when Kraken and Circle go public. 21Shares caped off the positive sentiment with an excellent outlook for 2025 - stablecoins are now the 16th largest holder of US debt. 🔭

💰 Firms Putting Up Big Bucks and Partnerships for Tokenization 

The trend of tokenization investment is further supported by Premier Art Holdings tapping Chintai Nexus to kick off a $50 million tokenized fine art fund. Backed Finance is also working together with Fortlake to bring its Sigma Opportunities fund to the blockchain, and Apex Group and Ownera are collaborating for greater distribution and serving of tokenized assets. Friendship, friendship everywhere. 🤝

Milestones are also being hit regularly. Akemona Technologies’ tokenization platform soared past $100 million in total value locked. Private credit tokenization has also hit a $650 million monthly milestone, demonstrating the voracious appetite for technological disintermediation of non-bank private lending. Recall Franklin Templeton stating that tokenization leads to issuance costs around 30,000 times cheaper than traditional issuances, and this explosion in volume starts to make a lot of sense. 💥

Speaking of Fraklin Templeton, Jiritsu is now verifying their tokenized funds. An Abu Dhabi bank is also joining Libre for collateralized lending, further bolstering the ranks of the initiated. The Hashgraph Group is also partnering with SettleMint for enterprise blockchain, while SIFMA issued a comprehensive report on a DLT and tokenization proof of concept in conjunction with Digital Asset. ✍️

🌱 Stablecoins Continue to Grow While Central Banks Experiment

21Shares isn’t the only entity interested in the massive rise of stablecoins. BounceBit is going all in on tokenization and integrating USDY, while Binance and Circle are joining forces to expand stablecoin use globally. Tether, which recently pulled out of Europe, now has USDT recognized as a virtual asset by ADGM. 🚀

Mountain Protocol is also on a tear, with State Street’s TRIXX Money Markey Fund now being used for its USDM reserves. This growth in backing comes on the heels of Compound Labs adding USDM as a collateral asset to its DeFi lending protocol. The blending of TradFi and DeFi continues, with Hong Kong releasing its new stablecoin bill to top off the stablecoin dessert. 🍒

Central banks refuse to be left behind in the race to tokenize! The Philippines recently completed its CBDC trial, while KBank has expanded cross-border payment trials using JPM Coin to make it happen. Recall JP Morgan’s Onyx network, which was recently rebranded to Kinexys, signaling a new state for the already highly successful project. A recent paper on the digital pound also explored how central banks can balance privacy while leveraging CBDC technology. ⚖️

📊 Countries More Bullish Than Corporations? 

Interestingly, some countries seem more tokenized-forward than their corporate counterparts. El Salvador’s digital asset issuer raised $30 million via a US Treasury offering, and the country signed an agreement with Argentina to help develop the crypto industry. But… states move slower than companies for a reason. El Salvador is an isolated case for now. 🌋

Amazon shareholders are pushing for a minimum 5% allocation to Bitcoin, fulfilling Anthony Pompliano's recommendation from years past. However, Microsoft shareholders recently shot down their own Bitcoin treasury proposal. The idea of Microsoft having Bitcoin on the balance sheet was laughable two years ago. Things change quickly. 🏢

While a drone DePIN company raised $11.5 million, and Nissan is using NFTs for a Web3 loyalty program, a16z is making some of its own big predictions for 2025. They see government bonds and AI as the big winners throughout the year. To cap off this week, Consensys had a fantastic report about Web3 perception and trends. Some of the results may surprise you, and the report is worth reading. 

🎁 It’s Almost Time

We turned around to write about tokenization, and somehow 2024 disappeared! 

This year flew by, and we’re immensely grateful for your trust in us as your go-to source for news, insights, and reports on tokenized assets.

The best is yet to come, and we’ll finish this year off strong! 

See you in the next one. ♥️