Video Source: CNBC Television on YouTube
The cryptocurrency market remains range-bound with a slight bearish bias as Bitcoin (BTC) struggles to hold above $25,000. While preparing this report, Bitcoin was trading at $26,397, reflecting a gain of 1.40% in the past 24 hours. Ethereum (ETH) had gained 2.40% to trade at $1,675. XRP was trading at $0.5279, up 1% in the same period.
Major cryptocurrencies, which have gained ground in the past 24 hours, are Bitcoin Cash (BCH, $192.40, 2.50%), ChainLink (LINK – $6.33, 2.80%), IOTA (IOTA – $0.1458, 1.20%), Shiba Inu (SHIB, $0.00000831, 1.90%) Solana (SOL, $21.65, 4.70%), Cardano (ADA, $0.2690, 3.70%), VeChain (VET, $0.01625, 0.80%), and Avalanche (Avax- $10.27, 1.40%), Stellar (XLM, $0.1283, 5.60%), Binance Coin (BNB – $216.53, 1.30%), EOS (EOS – $0.5913, 1.90%), and Polkadot (DOT, $4.50, 1.90%).
Government level initiatives
The US Federal Reserve issued two documents focusing on banks engaged in innovative technologies
The US Federal Reserve released two documents related to banks involved in developing and implementing innovative technologies. One of those documents is about banks involved in stablecoins, while the other document is about setting up a “Novel Activities Supervision Program” (Progam). Three of the four domains of the latest Program’s activities are associated with crypto and DLT.
One of the focal areas pertains to the broader application of Distributed Ledger Technology (DLT) for securities or asset tokenization, along with the facilitation of deposit tokens. Secondly, the endeavor is also focused on cryptocurrencies, encompassing activities such as custodial services, crypto-backed lending, and the issuance of stablecoins.
The Fed has stated that the objective of the initiative is to broaden its technical knowledge and to have an in-depth idea about the risks involved in setting up necessary regulations. The central bank will inform banks that will partake in the program.
Private sector initiatives
Soramitsu, has launched the Mutsumi venture to enable cross-border payments
Blockchain-focused firm Soramitsu has initiated a new venture to facilitate payments between Cambodia, Japan, and other Southeast nations. The firm is the core developer in Cambodia’s Project Bakong, which built a quasi-central bank digital currency (CBDC). The latest Mutsumi venture, which means friendly relations, will utilize Bakong and stablecoins to support Japanese SMEs in offering goods and digital services to Southeast Asian clients via e-commerce.
Digital transformation firm VIVIT will execute the venture in partnership with Tama University. Furthermore, by the end of next year, the firm intends to establish a “Bakong Economic Zone” by employing the technology utilized in Cambodia to pave the way for Japanese SMEs to access the huge offshore market.
Interestingly, Cambodia’s Bakong already facilitates cross-border payments through the use of QR codes with Thailand, Malaysia, and Vietnam. The system intends to connect Laos, India, and China as well. Instead of trying to connect all the countries one-on-one and then with Japan, the plan is to connect Japan to Bakong through a Japanese stablecoin.
Employing stablecoins and CBDC minimizes costs, and Bakong will soon link to seven provinces. As Cambodia is a dollarized nation, forex transactions are quite easy.
MUFG and NTT Data have collaborated to enhance Japan’s digital corporate bond market
Mitsubishi UFJ Trust and Banking Corporation (MUFG) has partnered with NTT Data to improve Japan’s digital corporate bond market. In this regard, MUFG rolled out the blockchain tokenization framework Progmat. Furthermore, NTT Data owns Japan Information Processing (JIP) which manages the country’s largest bond issuance and payment agent platform. JIP’s bond issuance platform is utilized by roughly 95% of the country’s JASDEC (Japan’s Securities Depository) agents.
Blockchain is anticipated to slash expenses related to bond issuance and servicing and also simplify the use of bonds as collateral in other dealings. Small bond issuances are possible due to low costs. Additionally, it aids fractionalization or the issue of bonds with small denominations, widening the investor pool.
The partnership involves the development of a standardized framework for corporate bonds and a wider digital asset partnership, and MUFG Bank will back the issuance of bonds.
The enterprises intend to work on a proof of concept for DBM (Digital Bond Management).
Prontoblock teamed up with Mercantile Bank to facilitate customer issuance of tokenized commercial
Tokenization firm Prontoblock agreed with Mercantile Bank to facilitate the bank’s customers to purchase or issue tokenized commercial paper or corporate unsecured short-term debt.
It should be noted that all DLT-related transactions require permission from the Federal Reserve of the OCC. So, this development (tokenization of commercial paper) comes as a surprise. Mercantile Bank, even though headquartered in Puerto Rico, is a US bank. Therefore, its regulator is the Puerto Rico Office of the Commissioner of Financial Institutions.
Even though commercial paper falls under the category of security, there is no need to register it with the US SEC, even if the target customers are in the US, as long as the maturity is less than nine months. Furthermore, the conditions remain relaxed if the commercial paper offered in the US is rolled over continuously. Interestingly, the outstanding balance of the US commercial paper market is currently $1.10 trillion, which is 50% of the value in 2007. At that time, over 50% of the total value of commercial paper issued was an asset. The figure stands at roughly 25% today.
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.
