The cryptocurrency market has once again turned slightly bullish, with Bitcoin (BTC) reclaiming $70,000. While preparing this report, Bitcoin was trading at $70,494, up 5.50% in the past 24 hours. Ethereum (ETH) has gained 5.40% to trade at $3,620. XRP was trading at $0.6453, an increase of 2.30% in the same period.
Major cryptocurrencies that have gained ground in the past 24 hours are Binance Coin (BNB – $591.55, 2.20%), Polkadot (DOT, $9.90, 5.30%), Cardano (ADA, $0.6657, 3.20%), Polygon (MATIC – $1.06, 4.50%), Solana (SOL, $191.41, 3.90%), Avalanche (Avax- $58.43, 4.10%), Bitcoin Cash (BCH, $489.98, 1.30%), Shiba Inu (SHIB, $0.00002894, 4.10%), EOS (EOS – $1.09, 3.40%), ChainLink (LINK – $19.71, 5.50%), and VeChain (VET, $0.0453, 5.30%).
Government Level Initiatives
Hong Kong Launches Project Ensemble for Wholesale CBDC Initiative
The Hong Kong Monetary Authority (HKMA) has unveiled Project Ensemble, a new wholesale central bank digital currency (wholesale CBDC) initiative. The wholesale CBDC will pave the way for interbank settlements for tokenized commercial bank money (tokenized deposits).
The wCBDC Sandbox will be used to test different scenarios, like the recent $756 million issuance of tokenized green bonds by the Hong Kong government. Payments will be made using tokenized deposits. Additionally, the Sandbox will explore applications such as settling transactions for carbon credits, tokenized aircraft instruments, electric vehicle charging stations, electronic bills of lading, and treasury management.
The HKMA envisions the likelihood of a fresh financial market infrastructure (FMI) to close the gap between tokenization solutions and money. Interestingly, the BIS is not involved in the other CBDC initiatives, but the HKMA intends to rope in other central banks.
Bank of Israel Reveals Unique Features of Digital Shekel Currency
The Bank of Israel recently published a paper about its upcoming digital currency, the digital shekel. This currency is different from others in a few ways. One difference is that it can earn interest. Another is that it separates banks’ roles from providing wallets and payment services. The central bank plans to release more papers this year, aiming to have a design document ready by December 2024.
In many digital currencies, users have a wallet provided by a bank or payment company they already use. This same provider manages the wallet and handles payments. But Israel’s central bank has a different approach. They want users to have the freedom to choose their wallet provider and connect it to different banks for adding or withdrawing money through open banking APIs.
Private Sector Initiatives
OSTTRA to Introduce FX PvP Settlement Service Using Baton Systems’ Core FX DLT
OSTTRA, a collaborative venture between S&P Global and CME Group, revealed its intention to roll out an FX PvP settlement service powered by the Core FX DLT solution developed by Baton Systems.
The Committee on Payments and Market Infrastructures (CPMI) has continuously highlighted FX settlement risks. A considerable proportion of foreign exchange (FX) transactions, assessed to be $2.20 trillion per day, are settled without the involvement of CLS. To mitigate risks, the CPMI has been fostering the adoption of payment versus payment (PvP) mechanisms, which guarantee concurrent settlement of both sides of a transaction.
Several new platforms facilitating PvP utilize distributed ledger technology but are yet to be rolled out or remain to be proven. Nevertheless, Baton’s Core FX has gained momentum, with HSBC and Wells Fargo contributing to a major percentage of activity. Both banks are expected to start using the OSTTRA’s service in the months ahead.
SBI Digital Markets Teams Up with CAT Financial Products for Structured Products
SBI Digital Markets (SBIDM) has partnered with Switzerland-headquartered CAT Financial Products (CATFP), which operates and issues a structured products technology solution. CATFP has been in partnership with asset managers, banks, and institutional investors for the last 16 years.
SBI Digital Markets is a portion of SBI Digital Asset Holdings and offers tokenization, advisory services, and digital asset custodial services. Both parties intend to work together on issuing and distributing structured products in Asian regions other than Switzerland.
Stepping back, structured products are custom-made securities with features similar to derivatives. They usually have low profits and are standardized. Therefore, it is important to efficiently create and issue them. The digital securities issuance platform D7, launched by Deutsche Börse, has mainly been used for large-scale issuance of structured products, reaching 15,000 in recent months. This is because it helps make the issuance process more efficient. HSBC has also looked into using blockchain for structured products in their Project Guardian.
CATFP possesses a platform called CUGLOS for managing the lifecycle of structured products. SBIDM is currently integrating this platform with its own tokenization platform. The two companies aim to launch the initial set of structured products in Switzerland, Europe, and Asia in the upcoming months.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
