Security Token Advisors 🌴’s Post

We are very excited to publish our State of Security Tokens 2023 - Q4 report with our client and sponsor Blue Water Financial Technologies . Peter Gaffney 🌴 and the Security Token Advisors 🌴 team cover the following topics: Key retail & institutional themes in the tokenization and real world assets space including: - Treasury, private credit, and real estate growth - Asset-Backed Securities (ABS) originations and securitizations - Investment banking platforms and digital bond placements - Global distribution channels & preferential jurisdictions - M&A and Investment Activity Secondary Trading Activity (40+ graphs and charts from Security Token Market 🌴) M&A and Investments 50+ Service Provider Updates Public and Private Blockchain Developments Full Report Available Here: https://lnkd.in/gaFXk_KZ Mentioned companies (in order of appearance): Provenance Blockchain Foundation , Figure, Stellar Development Foundation, Liquid Mortgage, Hashnote, Ondo Finance, Citi, UBS, J.P. Morgan, Apollo Global Management, Inc., WisdomTree/ WisdomTree Asset Management, Wellington Management, HSBC, Goldman Sachs, Coinbase/ Coinbase Asset Management, Monetary Authority of Singapore (MAS), Hong Kong Monetary Authority (HKMA), BondbloX, MUFG, Broadridge, Societe Generale, EquiLend, Intain, Vanguard, Reserve Bank of Australia, Union Investment, AXA Investment Managers, DekaBank Deutsche Girozentrale, DZ BANK AG, European Investment Bank (EIB), Siemens, Sumitomo Life Insurance Company, OSL, The Bank of East Asia, Limited (BEA) (Continued in the comments)

How to stay on top of all the innovation in this industry? Here is a huge hint.

This white paper from Deutsche Bank and Northern Trust https://lnkd.in/gyvrrgaD on institutional DeFi highlights a critical intersection that's reshaping the financial landscape: the convergence of decentralized finance (#DeFi) and asset tokenization. 📢 𝐒𝐢𝐱 𝐫𝐞𝐚𝐬𝐨𝐧𝐬 𝐰𝐡𝐲 𝐭𝐡𝐢𝐬 𝐜𝐨𝐧𝐯𝐞𝐫𝐠𝐞𝐧𝐜𝐞 𝐦𝐚𝐫𝐤𝐬 𝐚 𝐩𝐢𝐯𝐨𝐭𝐚𝐥 𝐦𝐨𝐦𝐞𝐧𝐭 𝐟𝐨𝐫 𝐢𝐧𝐬𝐭𝐢𝐭𝐮𝐭𝐢𝐨𝐧𝐚𝐥 𝐟𝐢𝐧𝐚𝐧𝐜𝐞: 1. 𝐄𝐱𝐩𝐚𝐧𝐝𝐢𝐧𝐠 𝐭𝐡𝐞 𝐀𝐬𝐬𝐞𝐭 𝐔𝐧𝐢𝐯𝐞𝐫𝐬𝐞: DeFi protocols, originally built for crypto-native assets, are now being adapted for tokenized real-world assets. This expansion is not just about digitizing traditional securities; it's about creating entirely new asset classes and financial products. The paper's mention of tokenized funds and refinancing of tokenized instruments using stablecoins is just the tip of the iceberg. 2. 𝐋𝐢𝐪𝐮𝐢𝐝𝐢𝐭𝐲 𝐑𝐞𝐯𝐨𝐥𝐮𝐭𝐢𝐨𝐧: By bringing tokenized assets into DeFi ecosystems, we're witnessing a potential liquidity revolution. Assets that were once illiquid or had limited trading venues can now tap into global, 24/7 liquidity pools. This could dramatically reshape how we think about asset liquidity and valuation. 3. 𝐏𝐫𝐨𝐠𝐫𝐚𝐦𝐦𝐚𝐛𝐥𝐞 𝐅𝐢𝐧𝐚𝐧𝐜𝐞: The fusion of DeFi and tokenization introduces unprecedented programmability to financial assets. Smart contracts can automate complex financial operations, potentially reducing costs and increasing efficiency in asset management. 4. 𝐑𝐞𝐠𝐮𝐥𝐚𝐭𝐨𝐫𝐲 𝐀𝐝𝐚𝐩𝐭𝐚𝐭𝐢𝐨𝐧: As the paper notes, regulators are beginning to grapple with this new paradigm. The principle of "𝐬𝐚𝐦𝐞 𝐚𝐜𝐭𝐢𝐯𝐢𝐭𝐲, 𝐬𝐚𝐦𝐞 𝐫𝐢𝐬𝐤𝐬, 𝐬𝐚𝐦𝐞 𝐫𝐞𝐠𝐮𝐥𝐚𝐭𝐢𝐨𝐧𝐬" suggests that tokenized traditional assets will be regulated based on their nature, not their form. This regulatory clarity is crucial for institutional adoption. 5. 𝐍𝐞𝐰 𝐌𝐚𝐫𝐤𝐞𝐭 𝐒𝐭𝐫𝐮𝐜𝐭𝐮𝐫𝐞𝐬: The blend of DeFi principles with tokenized assets is giving rise to novel market structures. We're moving away from traditional, siloed systems towards more open, interoperable financial ecosystems. This shift could redefine roles in the financial industry and create new opportunities for innovation. 6. 𝐂𝐡𝐚𝐥𝐥𝐞𝐧𝐠𝐞𝐬 𝐀𝐡𝐞𝐚𝐝: Significant challenges remain. Issues of custody, compliance, and prudential treatment of these assets need robust solutions. The industry must collaboratively work on standards for interoperability and risk management to fully realize the potential of this convergence. As financial institutions continue to explore this space, the question for institutions now is not whether to engage with this trend, but how to strategically position themselves in this evolving landscape. #DeFi #tokenization #digitalassets #rwa #FinTech #blockchain

𝗔𝗿𝗲 𝘆𝗼𝘂 𝗿𝗲𝗮𝗱𝘆 𝗳𝗼𝗿 𝗻𝗲𝘄 𝗯𝘂𝘇𝘇 𝗳𝗿𝗼𝗺 𝘁𝗵𝗲 𝘁𝗼𝗸𝗲𝗻𝗶𝘀𝗮𝘁𝗶𝗼𝗻 𝗺𝗮𝗿𝗸𝗲𝘁 𝗳𝗿𝗼𝗺 𝗹𝗮𝘀𝘁 𝘄𝗲𝗲𝗸? 𝗧𝗵𝗲𝗻 𝗯𝘂𝗰𝗸𝗹𝗲 𝘂𝗽, 𝗲𝗻𝗷𝗼𝘆 𝘁𝗵𝗲 𝘃𝗶𝗲𝘄 𝗮𝗻𝗱 𝗼𝗳𝗳 𝘆𝗼𝘂 𝗴𝗼 😎 : » RWA Tokenization Best Performing Crypto Sector in May with a 58% gain, driven by developments like Galaxy Digital's Stradivarius-backed loan and support from industry leaders like BlackRock's Larry Fink. » SEC Commissioner Uyeda to Highlight Benefits of Securities Tokenization, emphasizing improved security, transparency, and reduced costs, while calling for aligned global regulations. » Tether.io to Launch "Alloy by Tether" - A Digital Asset Backed by Tether Gold, with the first token aUSD₮, over-collateralized by Tether Gold stored in Switzerland. » infineo to Mint $9M of Life Insurance Policies on Provenance, marking a first in the insurance industry, integrating traditional finance with blockchain. » BrickMark Group to Close CHF 10M Investment for Real Estate Tokenization, utilizing the Dynasty D¥N payment token on its platform BRICKGATE, launching in Brazil with projects worth over USD 400 million. » Index Coop RWA Basket Builds on High-Yield ETH Index in partnership with Fortunafi, launching a Real World Asset Index Token for non-US investors, including tokens from Maker, Ondo Finance, Ethena, Centrifuge, Canto, and Maple Finance. » EY-Parthenon Survey to Reveal Increasing Interest for Tokenized Assets Diversification, with 94% of institutional investors showing long-term confidence in crypto and blockchain technology. » Swiss Wholesale CBDC Trial with SDX Extended by 2 Years due to its success, with CHF 750 million in digital bonds settled and CHF 64 million in SNB Bills issued on the SIX Digital Exchange (SDX). » Citi to Unveil Integrated Digital Assets Platform CIDAP, including Citi Token Services for 24/7 corporate money movement and tokenized trade guarantees, supporting initiatives like digital asset custody and FX Swaps. » McKinsey & Company Report: Tokenized Repos are Leading Blockchain Use, highlighting significant transaction volumes with Broadridge reporting over $17 trillion in repo trades. What else did I miss? 💬 𝐘𝐨𝐮 𝐝𝐨 𝐧𝐨𝐭 𝐰𝐚𝐧𝐭 𝐭𝐨 𝐰𝐚𝐢𝐭 𝐟𝐨𝐫 𝐦𝐞 𝐭𝐨 𝐩𝐨𝐬𝐭 𝐚𝐛𝐨𝐮𝐭 𝐭𝐡𝐞 𝐧𝐞𝐰𝐬? 𝐓𝐡𝐞𝐧 𝗷𝗼𝗶𝗻 𝗼𝘂𝗿 𝗧𝗲𝗹𝗲𝗴𝗿𝗮𝗺 𝗰𝗵𝗮𝗻𝗻𝗲𝗹 𝘄𝗵𝗲𝗿𝗲 𝘄𝗲 𝗽𝗼𝘀𝘁 𝗱𝗮𝗶𝗹𝘆 𝘂𝗽𝗱𝗮𝘁𝗲𝘀 𝗳𝗿𝗼𝗺 𝘁𝗵𝗲 𝗱𝗶𝗴𝗶𝘁𝗮𝗹 𝗮𝘀𝘀𝗲𝘁 𝘀𝗽𝗮𝗰𝗲 (🔗link in the comments). #Particula #TheNextGenOfRatingsForTheNextGenOfAssets

The adoption of tokenized financial assets has been slow, and it is far from widespread adoption. However, McKinsey predicts some will take off faster. According to consulting firm McKinsey & Company analysts, tokenized financial assets have experienced a “cold start”; however, they are projected to attain a market size of approximately $2 trillion by 2030. […] #Crypto #assettokenization #McKinsey

Tokenisation Takes Center Stage as HSBC, BlackRock, and Moreliquid Make Waves 🚨 This month, major players in the financial world have taken significant steps towards tokenisation, showcasing the growing importance of this technology in the industry. 1️⃣ HSBC becomes the first bank to offer tokenised gold, allowing clients to possess tokenised ownership of physical gold stored in the bank's London vaults. Each token represents 0.001 troy ounce of gold, making it easier for institutional investors to trade and manage their holdings. 2️⃣ BlackRock launches its first Ethereum-based tokenised fund, the BlackRock USD Institutional Digital Liquidity Fund (BUIDL). This fund, fully collateralised by cash, U.S. Treasury bills, and repurchase agreements, provides qualified investors with an opportunity to earn U.S. dollar yields. 3️⃣ moreliquid tokenises the HSBC Euro Liquidity Fund, offering investors increased liquidity, versatility, and security. The MMMEUR token, developed in collaboration with Tokeny, utilises the ERC3643 standard for issuance and ensures compliance with blockchain based securities regulations. These moves highlight the growing trend of traditional finance embracing blockchain technology and the potential for tokenisation to revolutionise the way we invest and manage assets. As the tokenisation space continues to change, we can expect to see more innovative solutions that bridge the gap between traditional finance and the world of digital assets. --- Meet moreliquid. moreliquid is a digital assets platform that offers end-to-end services to asset managers for tokenised securities. ▶ Follow us, moreliquid ▶ Subscribe to our newsletter: https://lnkd.in/g2ZY8QTX

Tokenized United States #Treasuries could reach $3 billion by the end of 2024, showcasing the benefits of financial asset #tokenization and its widespread adoption. Tokenized Treasuries would need to grow nearly twofold to reach the $3 billion mark by the end of this year. Reaching the $3 billion mark is possible due to the growing trend of decentralized autonomous organizations (#DAO) increasingly diversifying their holding into tokenized #US Treasuries, according to Tom Wan, a research strategist at 21.co. “With the two projects allocating to tokenized US treasury, we could be seeing the total market cap of tokenized US treasury increasing to $3B+ by the end of 2024,” he said. ℹ Tokenized US government #securities have amassed over $1.6 billion in total assets under management, according to Dune-Data. Tokenized US Treasuries will grow to $3 billion thanks to the product offerings of global giants like Securitize and BlackRock. Wan added, “As the strategy laid out by Securitize and BlackRock, they intend to provide diversification for the #crypto ecosystem to access risk-free US #treasury yield without needing to leave the #blockchain ecosystem." Further details in the thorough Cointelegraph article by Zoltan Vardai. #AltBanking The leading aggregator, bringing the best actionable news, information and opportunities in this rapidly evolving ecosystem right to you. Follow us to stay up-to-date! #finance #fintech #TradFi #DeFi #Web3 #tokenisation #investment #digitalassets #RWA https://lnkd.in/eTMV82VS

🚀 Tokenization: Transforming Collateral in Derivatives Markets & Custodian Roles 🚀 Tokenization is set to transform the way collateral is managed in the derivatives markets, offering faster, more efficient, and lower-risk solutions. Traditionally, moving collateral takes days to settle, resulting in delays and additional risks, especially during volatile market conditions. With tokenized collateral, these transfers can happen almost instantly, drastically improving the efficiency of margin calls and overall market operations. 🔑 Key Benefits to Custodians: • Increased Efficiency: Tokenized collateral allows custodians to reduce manual processes and bottlenecks, enabling real-time collateral transfers. • Reduced Risk Exposure: Faster settlement minimizes the risk of shortfalls and liquidity issues during high volatility. • New Service Opportunities: Custodians can expand their service offerings by providing safekeeping for tokenized assets and other digital services. • Streamlined Operations: Smart contracts can automate collateral flows, reducing human error and creating more seamless operations for clients. 💡 Major players like Société Générale (SocGen) FORGE, Hashnote, and BlackRock are leading the charge, exploring the use of tokenized money market funds (MMFs) and digital bonds as collateral. As more traditional finance (TradFi) firms experiment with tokenized assets, custodians have a unique opportunity to evolve alongside these innovations. 🌍 Will EU and US Regulators Approve Tokenized Collateral? While Europe and the US are exploring regulatory frameworks for DLT-based collateral, the CFTC is already being lobbied to include these solutions in traditional markets. If approved, custodians will play a central role in supporting this shift, ensuring the secure and efficient management of tokenized assets. The future of derivatives is instant, secure, and tokenized. Custodians who embrace this change will lead the way in shaping the future of finance, reducing friction while unlocking new possibilities. Are you ready for the shift? #Tokenization #Custodians #Collateral #DLT #Derivatives #TradFi #Blockchain #FinancialInnovation #CFTC #SocGen #BlackRock #Hashnote #Finance https://lnkd.in/du8QGq4u

Goldman Sachs, a stalwart of traditional finance, is making a powerful statement with its latest move into the world of tokenization. As Mathew McDermott, the global head of digital assets, recently disclosed to Fortune, the banking titan plans to launch three #tokenization projects by the end of this year. This strategic decision signals more than just a passing interest—it’s a commitment to reshaping the future of investment. Goldman Sachs' initiatives will target high-demand assets like money market funds and real estate holdings. This approach is not only innovative but also reflective of a broader trend among financial giants, such as BlackRock and Fidelity Investments, who are similarly exploring the #crypto frontier. What sets Goldman Sachs apart is its focus on institutional clients and private blockchains, a prudent move given the current regulatory landscape. By prioritizing the creation of marketplaces for tokenized assets, Goldman Sachs is aiming to enhance both the speed and efficiency of transactions while expanding the types of assets that can be leveraged as collateral. This could potentially open new doors for institutional investors seeking reliable, scalable, and compliant digital asset solutions. Critics within the firm, like Sharmin Mossavar-Rahmani of Goldman Sachs Wealth Management, have expressed skepticism about crypto as a viable asset class. However, the diversity of thought within such a vast institution can be seen as a strength rather than a weakness. McDermott’s enthusiasm and the bank’s active engagement in digital assets reflect a broader, institutional acceptance of the transformative potential of blockchain technology. The upcoming U.S. presidential election and possible regulatory shifts could further shape Goldman Sachs' crypto strategy. Should regulatory barriers ease, we might see Goldman Sachs expanding its services to include spot crypto asset holdings and other related offerings, further cementing its position at the forefront of digital finance. https://lnkd.in/dD2PUecX

Following a triumphant Series A funding round that netted over $40 million, global digital asset banking group Sygnum Bank, under the guidance of co-founder and CEO Gerald Goh, is eyeing strategic growth and innovation. In a conversation with Blockhead, Goh elaborated on the company’s next steps, showcasing a keen blend of regulatory insight and optimism for the crypto sector's prospects. Goh's strategy has always been clear-eyed about the potential and challenges of the digital asset sector. The recent funding success is testament to the confidence investors have in Sygnum's approach amidst the evolving #digitalasset landscape. "With fresh funds obtained, we will be looking to expand into at least 2 new jurisdictions – 1 in the EU and 1 in APAC," Goh said, highlighting the ambition to bring Sygnum's regulated digital asset-focused products and services to a broader audience. Sygnum's expansion is meticulously planned, reflecting an ambition tempered by the need to align with local market and regulatory requirements. "Our aim is to replicate our comprehensive suite of regulated digital asset-focused products and services in these new markets," Goh highlighted, underscoring the company’s commitment to adaptability and client satisfaction in its scaling efforts. Navigating regulatory landscapes is a cornerstone of Sygnum's strategy. Goh acknowledges the global trend towards clearer regulations but remains cautious about the challenges ahead and warned against complacency. "Regulatory progress is still uneven and in some cases regulators run the risk of overreaching and becoming too prescriptive," he points out, stressing the importance of a balanced approach to foster broader mainstream adoption of digital assets. Sygnum's dual headquarters in Switzerland and Singapore, both leading jurisdictions for digital asset regulation, place the company in a strong position to tackle these challenges, Goh noted. Looking ahead, Goh is cautiously optimistic about the crypto market's prospects, especially with the potential for new bull cycles and the increasing institutional engagement. "There are a number of signs that point to a new bull cycle," he observes, highlighting the enduring interest in Bitcoin's safe haven properties and Ether's potential revival. Goh also notes the growing relevance of AI and tokenization as transformative forces in the market.