Alpaca Finance Institutional Newsletter #22
Highlights:
- Expansion of CBDCs
- Potential increased regulation over derivatives markets ahead
The majority of countries have announced development of central bank digital currencies (CBDC) with what seemed like PR activities to generate momentum. In the UK and EU, these initiatives are now gaining traction and getting closer to implementation. The ECB, which is at the forefront of digital innovation, has moved to provide assurances to the public, particularly surrounding the programmability and privacy of the new digital Euro. This was in response to public concerns that the CBDC is a move to replace cash in order to gain oppresive oversight into how, when and where the money is being spent. On this front, the UK has also announced it is hiring a lead within the Treasury to handle the CBDC rollout, seeking to position itself as a crypto hub.
Crypto derivatives markets, which are heavily used on centralized exchanges such as Binance, Kucoin and Bybit, may see choppy waters ahead. The ISDA (International Swaps and Derivatives Association) is releasing two papers on the legal and solvency risk of such products. Since exchange derivatives markets have recently become more restrictive to retail users in the US, Canada and UK, these papers may lay the groundwork for further tightening. Meanwhile, the ongoing centralization concern stemming from collapses like FTX continues to push participants on-chain, where protocols such as dYdX and GMX are filling the demand for derivatives.
News
- ISDA releases standard definitions for digital asset derivatives
- ECB executive board member outlines plans for digital euro to European Parliament
- UK gov’t is hiring a central bank digital currency lead for Treasury team
- Genesis eyes fast resolution to creditor disputes and bankruptcy exit in May
Regulation
- US securities regulator probes Wall Street over crypto custody
- South Korean prosecutors request arrest warrant for Bithumb owner
- Ireland’s central bank governor calls for ban on crypto ads targeting young adults
- British authorities split on banning sale of crypto investment products
Products
- Wilshire Teams Up With Crypto Trading Firm FalconX to Develop Digital Asset Indexes
- Swiss Bank Cité Gestion Becomes First Private Bank to Tokenize Its Own Shares
- Moody’s Developing Scoring System for Stablecoins
- Davos-launched blockchain project aims to be the ‘SWIFT’ of stablecoins and CBDCs
Funding
- Injective launches $150M ecosystem fund to boost DeFi, Cosmos adoption
- Blockchain developer QuickNode raises $60M at $800M valuation
- Blockstream raises $125M to finance expanded Bitcoin mining operations
- Sui-Based Ethos Wallet Raises $4.2M in Seed Round
