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🕵️ State Actors Holding Bitcoin?

RWA World Newsletter - July 12, 2024

Author

Ray Buckton
July 12, 2024

With asset tokenization on the rise, some are raising eyebrows over Germany. 🤨

🎯🔥 Rapid Fire Takeaways:

But not all governments have paper hands. The United States holds around 213,000 BTC and shows no signs of divesting. 🦾

And some jurisdictions are accumulating. El Salvador now has 5750 BTC and is adding more every chance it gets. ✌️

🏄 RWA World Wide! 

We’re always working hard to bring you the best of asset tokenization. ❤️‍

Chat with us live on Thursdays at 2 pm EDT at WolfWeb3 RWA and Fridays at 9:30 am EDT for the RWA World Roundup. 🎧

We’d love to hear your perspective on where the tokenization train is heading next! 🚆

🌅 Asset Tokenization on the Rise 

With attention starting to turn toward state actor’s Bitcoin holdings, it’s little wonder that RWAs emerged as the best-performing digital asset sector for Q2 2024, according to Artemis. Digital assets are becoming more legitimized with each passing quarter, and some governments are hedging their bets. 📊

Further evidence of this inevitable rise comes from BlackRock’s BUIDL fund, which recently soared past $500M AUM. They’re not the only tokenized Treasury game in town, either. Hamilton recently brought Treasuries to Bitcoin layer 2 solutions like Stacks, demonstrating the ongoing interplay between TradFi and DeFi. 💵

Foundations being laid everywhere:

💌 TradFi <3’s DLT?

Traditional financial firms in Asia are becoming increasingly partial towards on-chain experimentation. Japanese insurance provider Kyobo Life has partnered with Japan’s SBI for security tokenization, while Hong Kong-based entities HSBC and Hang Seng Bank’s work on e-HKD tokenized deposits is on full display in the latest Visa report. Topping things off, Hamilton Lane officially joined Project Guardian, further bolstering the Singaporean initiative's swelling ranks. 🐉

However, cutting-edge experimentation is the main driver for tokenized assets globally. Schroders Capital is working with reinsurance giant Hanover Re on a tokenized insurance-linked securities (ILS) platform. For the uninitiated, reinsurance is like insurance for insurance companies. Couple that with Partior testing tokenized FX PvP with DBS, JP Morgan, and Mizuho, and we’re officially getting to the bones of global asset management processes. 🍖

Speaking of DBS, its digital exchange business has skyrocketed, with volumes in the first five months of 2024 up 300% compared to last year. With volume increases like that, Standard Charter’s Zodia Markets’ move to buy Alan-Howard-backed Elwood Capital Management makes a lot of sense. 📈

⚖️ Policy and CBDCs

What kind of week would it be without some policy and CBDC drama? In the US, the House is set to take another swing at repealing SAB121, which prohibits banks from custodying digital assets for their clients. With President Biden vetoing the last bill, this next attempt may end up on the desk of the next administration. 👀

In Europe, the Digital Euro Association (DEA) released a report detailing MICAR’s influence on stablecoins. Their recommendations? Up the threshold for direct EBA supervision from the current EUR 5 billion to something like EUR 100 billion to encourage innovation and use less one-size-fits-all solutions, taking some inspiration from Switzerland. 📝

On the CBDC side of the conversation, Russia has outlined ongoing challenges with the BRICs Bridge payment system, not least of which is the ongoing sanctions against the country, which hopes to use digital assets to circumvent sanctions. That hasn’t stopped one of Russia’s largest trading partners, China, from cooperating with Kazakhstan on digital currency solutions. 🧱

However, in a move that will undoubtedly complicate inter-strait relations further, the Taiwanese central bank is pushing forward with its wholesale CBDC trials. They’re not in any rush to complete the process and plan to include retail CBDC solutions in the experiments to be fully comprehensive. 🏝️

👋 Bis Bald, Freunde!

Tokenized assets won Q2 from a performance perspective, but where they’re really shining is their inroads into traditional finance. 🛣️

The transactional efficiencies of tokenized assets are manifold – keep an eye out for our upcoming report on the current landscape of the RWA World asset categories and how they’ll likely be impacted by tokenization! 👀

Until next time! 😘