There are some exciting developments in the digital capital markets and payments space we can report on this week. First, one of the world's largest asset managers has announced it will offer cryptocurrency trading to its institutional clients. The asset manager polled its institutional client base, the majority of which wanted to trade directly in digital assets. Many of those investors see the value in cryptocurrencies' having low correlation with other asset classes.
One step forward, one step back: Bcause LLC, a crypto exchange and mining startup, announced it is preparing to launch its spot market near the end of May, and has also applied to the CFTC to be a registered designated contracts market and clearing organization. While this is good news for the company, it has now filed for bankruptcy protection under Chapter 11 and is seeking to restructure. Bcause hopes to exit its restructuring and take advantage of what it hopes will be a significant rise in bitcoin's price.
To counter the ongoing fraud threat in crypto, some traders are considering using blacklists to keep out bad actors who renege on trades or engage in fraud. Alternatively, it has been suggested that the industry use "whitelists," which would consist of those players that have been preapproved: verified customer identities and sources of funds.
In a first, two central banks sent each other digital currencies using blockchain technology. The Canadian and Singaporean entities have been collaborating to get this project off the ground, with a focus on facilitating simpler and more efficient cross-border payments. The Australian Stock Exchange is also looking for efficiency through distributed ledger technology, as it announced a new equities clearing system that uses blockchain as its backbone. The system will be fully in place by mid-2020.
Currency.com will now allow users to trade in tokenized government bonds. Tokens will be U.S. dollar-denominated, and investors will receive interest payments in fiat currency, bitcoin or ethereum. While currently limited to Belarusian bonds, trading of more bonds (both corporate and govvies) is planned. Finally, a legal services company is predicting many parties to smart contracts will soon be making payments in a stablecoin cryptocurrency, with the transfer automatically being affected once a contract is satisfied. The product is in beta testing, with full rollout expected later in May 2019.
For more information, please refer to the following links:
- Fidelity Will Offer Cryptocurrency Trading Within a Few Weeks
- Fidelity Survey Finds Institutional Investors Are Eyeing Crypto
- 'One-Stop Shop' for Crypto Mining and Trading to Launch Spot Market May 23
- Crypto Traders Ponder Blacklist to Keep Scammers, Thieves at Bay
- Central Banks Use Blockchain for First Time to Swap Currency
- Australia Stock Exchange: Successful opening of Customer Development Environment for DLT testing
- com launches first gov bonds pegged with crypto
- Millions of people might soon be using cryptocurrency without knowing it – Rocket Lawyer's new product, Rocket Wallet, could be one of the first practical uses for stablecoins that regular people can actually use.
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