Yasuda on Tokenization

We are officially live on the Coinbase BASE network, further expanding our institutional-grade financial solutions across the blockchain ecosystem. This marks a significant milestone in our journey to bring institutional deposit tokens and institutional cash funds to a broader market of investors, enhancing liquidity, security, and accessibility.

Frictionless has selected Coinbase Prime and Custody services for our upcoming BTC Yielding Money Market Fund.
The Frictionless BTC Yielding Money Market Fund is a unique investment product that combines the stability of traditional money market funds (MMFs) with the growth potential of Bitcoin (BTC). This fund offers a principal-protected investment vehicle where investors can earn daily yields in BTC instead of traditional fiat currencies.
👀 Watch out for the announcement later this week.

Guggenheim Treasury Services (GTS), a subsidiary of Guggenheim Capital, has made a significant move in the financial technology space by issuing $20 million worth of Digital Commercial Paper (DCP) directly on the Ethereum blockchain. This issuance is conducted through the AmpFi.Digital platform developed by Zeconomy, represents a purely digital form of commercial paper rather than a tokenized version of a traditional instrument. The DCP received a P-1 credit rating from Moody's, the highest available for such instruments, highlighting its credibility in the financial market.
This landmark issuance by Guggenheim is part of a growing trend in the tokenization of real-world assets (RWA) on blockchain platforms, demonstrating the increasing interest from traditional financial institutions in leveraging blockchain technology. It addresses key challenges in decentralized finance (DeFi) such as credit quality, fees, and compliance issues. The move comes as the tokenized U.S. government securities market recently surpassed $2 billion in market capitalization, indicating a strong demand for these digital assets and showcasing the potential for blockchain to transform traditional financial instruments and processes.

Visa has introduced its Visa Tokenized Asset Platform (VTAP), designed to help banks issue and test fiat-backed tokens on blockchain networks. This platform aims to bridge the gap between traditional finance and blockchain technology, enabling financial institutions to explore tokenized assets in a regulated environment. VTAP focuses on token issuance, transfer, and redemption, addressing use cases including real-time money movement between bank clients, interbank transfers using wholesale central bank digital currencies (CBDCs), and cross-border transfers for multinational corporations.

The platform's development comes as Visa recognizes the growing interest in tokenization from both central banks and commercial financial institutions. Spain's BBVA is among the first to test VTAP, with plans to launch an Ethereum-based pilot in 2025. By providing a sandbox environment for banks to experiment with tokenized assets and smart contracts, Visa aims to create global standards for blockchain-based financial services and promote interoperability between different blockchain networks. This initiative demonstrates Visa's commitment to innovation in the payments industry and positions the company at the forefront of the evolving financial landscape, where tokenized real-world assets are expected to play an increasingly significant role.

The State of Asset Tokenization 2024 report, published by the Tokenized Asset Coalition (TAC), highlights significant growth in the tokenized asset market, which reached a total size of $186 billion, with a 32% increase year-to-date. Stablecoins continue to dominate the market, accounting for $174.5 billion of the total. However, the most impressive growth was seen in tokenized US Treasury products, which experienced a 179% increase in market capitalization. The report also notes advancements in other sectors such as private credit, commodities, and public equities, with various financial institutions and tech companies entering the space.

The report outlines key trends and developments in the tokenization landscape, including regulatory progress, particularly in stablecoin frameworks across different regions. It emphasizes the unique value propositions of tokenized assets, such as 24/7 liquidity and cross-collateralization capabilities. The document also highlights the increasing focus on emerging markets and the potential for tokenized assets to provide access to international equity markets for investors in developing economies. Looking ahead, the report suggests that changing macroeconomic conditions, evolving regulations, and the exploration of unique tokenization benefits will be critical factors shaping the industry's future.

Bitcoin has experienced a significant price surge, breaking through the $65,000 mark for the first time since August 26, 2024. This rally, which began on September 19, has been fueled by a combination of global economic factors, including China's recent economic stimulus measures and the U.S. Federal Reserve's rate cuts. The cryptocurrency's price increase mirrors the sharp rise in Chinese stocks, with the Shanghai Composite Index recording its best week since 2008.
Institutional demand remains strong, with BlackRock continuing to purchase Bitcoin and ETF inflows reaching $365 million, the highest in over two months. The recent price surge has reignited discussions about Bitcoin's potential as a store of value and its role in the global financial system. While some analysts predict that Bitcoin could reach between $100,000 and $150,000 this year, others, like ARK CEO Cathie Wood, have made even more bullish projections, suggesting Bitcoin could be worth more than $1.5 million per coin if institutions allocate 5% of their portfolios to it. However, it's important to note that the extreme price volatility still poses significant risks for inexperienced investors, as speculative trading continues to be the primary driver in the cryptocurrency market

September 30th 2024