Danny J. C.
Digital Asset Adoption - Disrupt Or Be Disrupted
Cryptocurrencies - digital assets - and Distributed Ledger Technologies such as Blockchain has captured significant attention from the media, financial institutions, governments, regulatory institutions, and investors over the last years.
Blockchain will change e-commerce and supply chain management; gaming; financial services such as lending, remittance and digital payments; data security and identity management; fundraising and asset digitalisation.
Gartner reported that blockchain technology will create more than $3.1 trillion dollars’ worth of business value by 2030. Deloitte found that 53% of senior executives listed Blockchain as one of their top five priorities.
From Silk Road (The Dark Side of Cryptocurrency) and ICO's to JPMorgan Coin, Facebook’s Libra and 'Central Bank Digital Currency', financial institutions increasingly show interest in Blockchain technology and its applications. Increasing governance is driving institutionalization and builds trust in the digital asset space.
Some examples of institutions actively involved in development of Blockchain tech and digital asset investments:
INTERCONTINENTAL EXCHANGE (ICE)
The Intercontinental Exchange (ICE), the parent company of the NYSE, has continued its push to offer regulated digital asset products and services. Bakkt, ICE’s Bitcoin futures exchange launched in September of 2019. The platform offers Bitcoin Futures, which are the first physically delivered cryptocurrency futures contracts ever traded on a regulated exchange in the US.
Nasdaq is active in supporting the growth of the digital asset ecosystem, eg by listing Bitcoin miner manufacturer Canaan; facilitating 8i Enterprises acquisition of blockchain services firm Diginex; entering agreements with blockchain software firm R3 to develop technology that lets financial institutions create their own tokens and digital asset marketplaces.
CME Group launched options trading on its regulated Bitcoin futures contract. The options are European style and use the regulated CME CF Bitcoin Reference Rate (BRR) for pricing.
Goldman invested in various digital asset startups eg BitGo in 2018. The digital asset custodian has also acquired Harbor, Lumina, as well as Hedge which ultimately leads to expansion of digital asset services to institutional investors.
JPMorgan successfully launched its internal digital asset, JPM Coin, in February 2019. The firm also has been exploring merging its internal blockchain team Quorum with ConsenSys, an Ethereum focused blockchain software technology company.
Citi increased its equity stake in Komgo — an Ethereum-based startup building an enterprise blockchain for trade financing. The firm also underwrote the Initial Public Offering (IPO) for Canaan, a global leader in mining equipment. Furthermore, Citibank participated in a joint effort with Goldman Sachs to conduct the first equity swap on a blockchain built using tools designed for Ethereum.
CS partnered with Société Générale and Paxos Trust Company to use Blockchain technology company’s settlement service, which operates on a permissioned
Bank of American has applied for over eighty patents in 2019. One of Bank of America’s patents includes an international settlement system based on cryptocurrency payment company Ripple’s distributed ledger technology.
HSBC to shift $20 billion worth of assets to a new blockchain-based custody platform, in one of the biggest deployments by a global bank.
Nomura teamed up with hardware wallet provider Ledger to create a digital asset custody solution. The firm aims to create a cryptocurrency ecosystem fit for institutional investors with the secure infrastructure for trading traditional assets.
UBS started already full-fledged Blockchain-based transactions on the platform we.trade. Other platform participants include Société Générale, HSBC, Santander, UniCredit, Nordea, KBC Bank, Rabobank, and Deutsche Bank.
The firm became first financial institution to issue a $112m digital bond on the Ethereum network.
The firm received a trust license that allows trading and custody of bitcoin. To expand liquidity on its digital asset platform, Fidelity Investments partnered with the digital asset marketplace platform ErisX.
TD Ameritrade' clients interest in digital assets increased substantial over the past years. To prepare for the inreased demand, the firm invested also in ErisX in 2018.
The firm announced it will develop its own cryptocurrency for international transfers. The new remittance platform would be pegged to the US dollar, based on Distributed Ledger Technology (DLT). Wells Fargo has also been an active investor in the space where it recently invested $5 million into U.K. startup Elliptic, which helps banks manage the risks associated with exposure to cryptocurrency.
The brokerages recent research revealed that millennials have a higher equity holding in Grayscale’s Bitcoin Trust (GBTC) investment product than Netflix stock. Charles Schwab reportedly agreed to buy TD Ameritrade, an active investor in the digital asset space.
ING Bank announced that it is developing technology to provide secure digital asset storage for its customers. The firm also holds a five-year licensing deal with R3 for the use of its Corda Enterprise platform.
The firm acts as administrator and transfer agent for Bitwise Asset Management' proposed Bitcoin ETF. BNY Mellon also joined the Marco Polo trade finance consortium running on R3's Corda.
The global custodian bank mainly focuses on tokenized assets such as stocks and bonds.
The firm launched the FTSE Digital Asset Indicative Index Series which consolidates assets into three different baskets: Infrastructure Tokens, Currency Tokens, and Utility Tokens.
VanEck and SolidX began to offer a limited version of their Bitcoin ETF-like product to institutional investors.
Germany's second largest stock exchange introduced the 21Shares Short Bitcoin (SBTC) ETP, which allows investors to short Bitcoin during declining price action thus providing them a positive return whenever Bitcoin's price falls.
The Canadian fund manager received approval from the Ontario Securities Commission to launch its Bitcoin fund on the Toronto Stock Exchange.
XBT Provider, a Stockholm-based subsidiary of UK-based digital asset manager CoinShares launched the first Litecoin (LTC) and Ripple (XRP) Exchange Traded Products.
The firm launched a physically backed Bitcoin ETP on SIX Swiss Exchange.
The Singapore-based digital asset platform, announced the launch of Asia's first institutional-grade Bitcoin index fund.
The social media and social networking company revealed the details of its cryptocurrency, Libra, a stable coin, which intends to let users buy and transact with nearly zero fees. The consortium incl. Uber, Spotify, Andreessen Horowitz, Union Square Venture, Coinbase, Shopify and Iliad SA.
The consulting firm has been active in the digital asset ecosystem and launched a public beta version of its token and smart contract review service which allows users to paste code for analysis.
The consulting firm partnered with Microsoft and R3 to develop a Blockchain for telecom settlements.
....and many more...
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Sources: Digitalassetresearch, DLA Piper,Digital Asset Network, CBInsights, IWS FinTech