The cryptocurrency market remains range-bound with a slight bullish bias as Bitcoin (BTC) hovers around $34,000. While preparing this report, Bitcoin was trading at $34,382, up 0.20% in the past 24 hours. Ethereum (ETH) had gained 1.10% to trade at $1,183. XRP was trading at $0.5785, an increase of 4.40% in the same period.
Major cryptocurrencies, which have gained ground in the past 24 hours, are Bitcoin Cash (BCH, $245.72, 0.40%), VeChain (VET, $0.01906, 0.40%), Shiba Inu (SHIB, $0.00000797, 0.30%), EOS (EOS – $0.6279, 0.40%), IOTA (IOTA – $0.1628, 2.70%), Avalanche (Avax- $11.48, 1.70%), Cardano (ADA, $0.3019, 2.60%), Polkadot (DOT, $4.51, 5.30%), and Solana (SOL, $35.95, 9.10%), ChainLink (LINK – $11.44, 2.10%) and Binance Coin (BNB – $227.13, 0.40%).
Government Level Initiatives
Zimbabwe’s Reserve Bank Introduces Gold-Backed Digital Token
The Reserve Bank of Zimbabwe has made the Zimbabwean gold-backed digital token (ZiG) a legal tender in domestic transactions. Nevertheless, there is no clarity on the manner in which the payment mechanism works. The bank continues to work on the technical framework to back daily transactions.
The central bank started issuing the tokens in May 2023, and in August it stated that the ZiG would offer the base for a central bank digital currency (CBDC).
Nevertheless, the ZiG project has limited objectives. The GDP of Zimbabwe is currently about $29.93 billion. At the end of September 28th, the central bank had released 16 tranches of tokens valued at 12,352 ounces of gold, or roughly $23.14 million (representing a minute fraction of GDP). State-run broadcast media has announced that the central bank intends to garner $100 million worth of gold, but the ZiG has a long road ahead before transforming into a full-fledged payment alternative.
The huge quantity of tokens was bought using Zimbabwean dollars. Considering the past history of hyperinflation that has plagued the country, the move is not a surprise. As of April 2023, 77% of local transactions in the country are carried out using US dollars.
One of the reasons for slow adoption could be the lack of trust in the central bank.
Private Sector Initiatives
Versana: Syndicated Loan Automation Platform Goes Live
Versana, which offers syndicated loans digitally, has gone live commercially. The platform was founded by a joint venture between Bank of America, Credit Suisse, Citi, and JPMorgan to enable the automation of processes. Until now, the platform has successfully cleared 1,500 loans worth $900 billion. The platform utilizes Digital Asset’s DAML smart contract language for workflows. Furthermore, Versana is a portion of the Canton blockchain network that facilitates interoperability.
Syndicated loan processing is cumbersome in terms of data management. Even though the borrower might only deal with the arranging bank, the huge loans are chunked between several lenders.
All parties involved in the loan, including third parties, trustees, and lenders, must keep track of drawn loans and borrowers’ repayments. Therefore, Versana intends to offer a single repository to facilitate anyone’s ability to monitor status and asset movements in real time.
Joseph Ferraiolo, the incumbent in the role of Head of Debt Capital Markets Operations and Merchant Bank Policy at J.P. Morgan, has emphasized the significance of integrating the network as a pivotal advancement toward the digitalization of data flows. This strategic move is poised to catalyze ongoing enhancements in operational efficiencies and transparency, all to the benefit of our valued clients.
Pirum Tests DLT-Powered Add-On for Securities Finance Solutions
The securities finance company Pirum has successfully trialed a distributed ledger technology-powered add-on for its securities lending and repo solutions. Pirum facilitates the automation of post-trade services, handling two million contracts valued at $3.50 trillion daily. The UK division of the company generated £29 million ($36m) in revenues last year, with the bottom line being £8 million ($10m).
Overall, Pirum does not signal a strong inclination toward embracing Distributed Ledger Technology (DLT), save for two specific usage scenarios. Pirum revealed its willingness to engage in collaborations with DLTs employed by its clientele, and it recognizes the advantages associated with tokenized assets. However, it maintains a more reserved stance in relation to the applicability of DLT in traditional stock lending and repo operations.
The objective of the trial was to present a gold record of transactions. The goal of the trials was to provide a golden record of trades. The advantages and disadvantages of using DLT were discussed by several clients and fintech firms.
Miscellaneous
Komainu Secures FCA License for Digital Asset Custodial Services in the UK
Komainu, which offers digital asset custodial services, has been granted a custodial license from the UK market watchdog, the Financial Conduct Authority (FCA). The license, which necessitates compliance with anti-money laundering legislation, enables Komainu, a firm established through a partnership between Nomura, Coinshares, and software firm Ledger, to offer crypto custodial services to institutions, in addition to collateral management services through Komainu Connect.
The collateral management solution is comparable to triparty mechanisms in traditional finance (TradFi). Komainu utilizes a trust model to guarantee assets are bankruptcy-remote.
The digital assets company was established five years ago in Jersey and started its commercial operations in 2020 after receiving local clearance from regulatory authorities. Notably, Komainu has also received licenses from Dubai’s VARA and Italy’s OAM registry. The company also operates in Singapore.
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.
