The internet has changed the way we consume information and living in the Information Age can make it difficult for businesses to get noticed. Nowadays, brands or projects have to be extremely strategic about how to drive consumer actions. When it comes to getting people to spend money, they also need to tell a story people will remember.

But what happens when you want to get investors for your crowdfund campaign? A social media campaign alone might not convert the necessary numbers of investors needed to make a crowdfund successful. This article is going to highlight different methods you can do to create a successful marketing campaign for your crowdfund.

Method 1: Include a banner or landing page on your site

Once the crowdfund is live you want to make sure everyone who visits your company’s page knows about it. Creating a banner an investor can click on that automatically takes them to your offering can generate more eyes to it. Prior to launching, investors can be taken to a page where they can pledge an amount they hope to invest (you’re testing the waters here).

See below for how Security Token Market created theirs

Method 2: Launch an Email Marketing Campaign

This method, although might seem simple enough, can work wonders if you strategize it correctly.

Prior to launching, you can send personalized emails to potential investors seeing if there is an interest for your offer. You can even tier the investors and personalize the emails in different ways, such as the following:

1. Investors that have invested in previous crowdfunds or businesses: These investors can usually be expected to invest a nice lump of cash since they might view them as assets. Your email to them should be a personalized email from the CEO of the company. In the email you might want to include specifics about what your company does and its advantage in the market. The call to action should be to schedule a call to explain in more detail.
2. Clients of your company: Depending on the service or product you offer, these investors’ primary reason for investing might not be because they want a share of the company, but rather because they want to feel a part of the community. They would hate to miss out on the opportunity. Their email should give them a sense of FOMO and use sentiment to describe what it means to be a member of your community. The call to action should be to invest in the fund.

Method 3: Create an entertaining way to explain your company’s story and history

A great story can take you a long way, keep this in mind when you are trying to explain your company. Make it interesting! No one wants to read paragraphs.

• Add photos of your employees
• Create a video explainer series — use short clips to explain your mission and what you guys are all about
• Highlight the company and team using captivating visuals

Method 4: Collaborate with other companies or other media groups to get the word out about your crowdfunding campaign

The more people see something, the more they like it. For this reason, you should make it a priority to be seen on all social media platforms.Not only should you be active on your own personal platforms, but you should also expand yourself to others. Here some ideas in how to do that:

• Join podcasts with industries or groups similar to your company’s.
• Collaborate with influencers to highlight your company and crowdfund.
• Join a community through Discord, Reddit or any other platforms interested investors might be in.

In Conclusion,

These are some methods that can increase your chances of acquiring more investors for your company. The main takeaway is to be intentional about each strategy and have a set outcome in mind. The more specific and targeted you can make it, the more likely it is to attract the right investors. Stay tuned for my next marketing article!

~Ana the Marketer

Pioneering the Security Token REIT: A Research Report by Mike Lingle at Security Token Advisors

Image from cvent.com

Nolan Reynolds International (NRI) has over 130 years of history developing and managing commercial real estate properties. Their current portfolio represents over $500 million in properties across the United States and Costa Rica.

Miami has become the center of the crypto universe, at least in the US, so it’s natural that NRI would select the city for the location of their first tokenization project.

In this article we’ll cover:

1. Why tokenize the THesis Miami?
2. The structure of the deal
3. The timeline of the tokenization
4. More deal terms
5. What’s next?

Why tokenize the THesis Miami?

The number one question that potential investors consistently ask NRI is:

“How can we get our money out earlier if we want to?”

This is because real estate investors are typically locked into deals for years or even decades. Groups of investors have to either all agree to sell together, or individuals in the group have to find people to buy their shares in the private markets. This inefficient process slows the discovery of both new investors and pricing (ie- “How much are my shares currently worth?”), which oftentimes results in a ‘liquidity discount’ for the seller.

The goal of early liquidity has made real estate a successful use case for security tokens. This has the added benefit of opening up these formerly private real estate deals to a broader market of investors who would previously not have been able to participate.

These two drivers — along with NRI’s forward-thinking management team — is what makes tokenization the logical choice for THesis Miami:

1. Early liquidity for real estate deals is a common use case that we’re seeing for security tokens. In fact, many of the listed tokens on STOMarket.com represent real estate properties.
2. Tokenization effectively democratizes real estate deals, giving primary investors early liquidity plus the ability to sell off portions of positions rather than an “all-or-nothing” ownership model. Secondary investors can then purchase ownership in properties they would never otherwise have access to.

The structure of the deal

NRI is recapitalizing the THesis Miami after successfully opening it during the pandemic, and they project a 9.24% yield:

The property is a newly constructed 770,000 SF expansive mixed-use development comprised of: THesis Residences with 204 residential apartments and a complementing hotel with 245 rooms. Nestled between the ground floor, is an open-air inviting public space surrounded by retail that promotes the live, work, and play themes which radiate throughout the entire community. The residential units are 99% leased as of June 2021 and the Hotel has become a strong partner for the University of Miami in both transient, group, and academic business.

One key point here is that the initial recapitalization is being done as a standard fundraise from accredited investors who are purchasing limited partnership (LP) interests in the operating partnership (called “OP Units”).

NRI is raising $75 million USD from a combination of private placement and up to $35 million USD in crowdfunding via the CrowdStreet platform. There is no tokenization in this first phase, so it looks exactly like a traditional real estate deal at first.

NRI is including the crowdfunding in order to increase the number of shareholders. This will both provide a larger number of potential tokenizers when the time comes, as well as reduce the risk that the REIT’s rules (see below) will be broken in terms of number of shareholders or concentrated ownership. Specifically, the rules state that REITs must:

• Have at least 100 shareholders
• Restrict ownership such that no more than 50% of its shares may be held by five or fewer individuals

The timeline of the tokenization

The tokenization will come later, after a six-month lockup period. NRI is shortening the typical one-year lockup via a private placement under SEC Rule 506(c) followed by registration of the REIT under the Securities Exchange Act of 1934 using Form 10.

On the first day following the lock-up period, existing shareholders will have the option to convert their operating partnership units (“OP Units”) into shares of the REIT, represented by a security token. The operating partnership and the REIT will be bundled into an UPREIT (umbrella partnership real estate investment trust). This UPREIT allows LP owners to exchange their OP Units for shares in the REIT as a tax-free transaction, since they are contributing property to the REIT.

This means that the REIT’s ownership of the operating partnership will grow over time as primary investors convert.

It is these REIT shares that will be digitized into security tokens and traded on the secondary market through one or more licensed exchanges known as Alternative Trading Systems (“ATS”) — such as Securitize Markets, tZERO, or INX.

These security tokens will represent equity interest in the REIT, along with rights to dividends and profit-sharing payments. The tax treatment of the REIT is also different than ownership of the OP Units — so investors who convert will:

1. Lose the depreciation benefits (based on a 29-year amortization schedule) of the OP Units that flow through to individual tax returns.
2. Gain the preferential tax treatment of the REIT, where long term sales of underlying assets or REIT shares itself may deem certain dividends to be “qualified dividends” and therefore provide more favorable tax rates.

The UPREIT allows OPs to exchange property (OP units) for security tokens that represent shares in the UPREIT. This provides new token holders with participation in the performance of NRI and associated benefits.

It’s important to reiterate that the original OP Units sold in the primary fundraise will not be tokenized. Primary investors benefit because they can:

• Participate in the initial offering and hold OP Units indefinitely to receive both tax benefits and a cash stream, just like they normally would.
• Convert their OP Units into digital securities that represent ownership of an associated REIT, which they can then hold indefinitely to receive a cash stream.
• Sell their digital securities on a secondary market in order to exit some or all of their investment on their own timeline.

It’s also important to note that security token holders (secondary investors) directly participate in the REIT’s performance until such time as they sell. They can hold the security tokens forever if they want, all the while benefiting from the cash flow. Secondary investors benefit because they can:

• Participate in a deal they would not otherwise have access to.
• Hold the REIT security tokens forever if they want, all the while benefiting from the cash flow.
• Sell their digital securities on a secondary market in order to exit their investment on their own timeline.

More deal terms

Distributions

NRI has created a simple waterfall structure where investors receive 100% of distributions from both Net Operating and Capital Event Proceeds up to an 8% return. After that, investors receive 75% of distributions.

Debt Financing

Debt is the biggest part of this deal. But on the debt side, we at Security Token Group have been hearing that some traditional lenders won’t work with crowdfunded properties. Lenders are concerned about capital calls: what happens if the property requires unexpected repairs that the crowdfunded investors aren’t prepared to pay?

NRI has leveraged its long history, proven financial reserves, and business acumen — as well as the way it has structured this deal — to secure debt financing from a well-known lender on reasonable terms.

Capital Calls

NRI has establishing a reserve fund to insulate LP owners from the risk of future capital calls. They have also left open the option of receiving more ownership if they need to contribute more capital. Specifically for the THesis Miami deal they state:

“A reserve fund will be established up front and LP owners will bear no risk of future capital calls. No partner will have the right or obligation to make additional capital contributions to the Operating Partnership other than the general partners in limited circumstances. However, if either general partner were to raise additional capital and contribute it to the Operating Partnership, that general partner will receive additional OP Units, and its percentage interest in the Operating Partnership will be increased in proportion to the amount of such additional capital contributed to the Operating Partnership.”

This protects NRI in rare cases where future capital calls could be larger than the reserve fund.

Governance

Real Estate crowdfunding projects can run into issues where group decision-making slows — or even stops — progress. NRI is retaining full governance of the project, including the right to select the property manager of their choice. This simplifies administration of the property, while still providing financial incentives to the investors. Neither the OP Units nor the security tokens represent voting shares in the governance.

Liquidity

NRI will work with a market maker to provide initial liquidity for the security token. They will also promote the THesis project to a second wave of investors who are interested in purchasing these security tokens. Remember that existing LP owners won’t have to convert all of their shares, which allows a wider range of investors to own smaller stakes in the THesis project. This is how the democratization of finance happens in this case.

What’s next?

NRI has successfully completed the initial fundraise for the THesis Miami. Both the private placement and the crowdfunding portions of the deal are fully-subscribed. We look forward to watching the tokenization in six months.

NRI is also planning to tokenize more properties. Their goal is to allow anyone to invest in any of their deals with the click of a button.

And for all you investors out there, keep your eyes open for this and future security tokens as they list on exchanges like tZERO and Securitize Markets.

Security Token Advisors

Security Token Advisors (STA) is the original consulting company in the industry, advising the first security token offerings (STOs) in 2017. Clients choose STA for deep industry experience, STO process optimization, and targeted introductions to the most relevant vendors at each stage of the process. STA’s expert team advises on the best approach and coordinate the necessary third-party services including lawyers, marketing, brokerage services, technology firms, etc.

Security Token Market

Security Token Market (STOMarket.com) is the cultural epicenter of the industry. STM tracks 100+ security tokens with live-trading data via API integration from marketplaces around the globe and garners 10 million+ impressions every year through its strong media presence including The Security Token Show and the Security Token Market Blog.

Follow Security Token Market on Twitter.

Everything in this report is for informational purposes. Nothing in this report should be taken as financial advice or as an inducement to purchase or sell any security. Nothing in this report should be used as legal advice. Always do your own research before making any decisions regarding financial transactions of securities.

Tokenizing the THesis Miami — Case Study was originally published in Security Token Group on Medium, where people are continuing the conversation by highlighting and responding to this story.

The recent boom of interest in financial technology is encouraging the most innovative investors to take a look at the changes happening in real estate. In 2018, Savills Global Research estimated that the value of real estate globally was approximately $280.6T with residential real estate accounting for $220.6T, commercial real estate accounting for $33.3T, and agricultural and forestry accounting for the rest at $27.1T. Recognized as the largest asset class (disregarding derivatives) and the most significant store of wealth in the world, investors are savvy to pay attention to how financial technology is revolutionizing the way that real estate and real estate development is managed, financed, leveraged, and traded in the digital age. Considering the internet and its key role in globalization to date, its impact on the global real estate market may still be quite nascent. The potential for fractionalization, cross-border trade, and heightened liquidity in real estate markets via digitization is only beginning to become apparent to leaders in real estate globally, let alone Miami.

Crowdfunding has been the obvious approach in taking advantage of internet technology in real estate investing. The ability to advertise an offering, introduced by the US Securities and Exchange Commission (SEC) in the JOBS act of 2012, has opened up the opportunity for online platforms as a channel to raise money from investors. The crowdfunding market has exploded since the passing of these regulations and is projected to grow at an unprecedented rate in the next decade. Sitting at just under $14 Billion in 2019, the crowdfunding market is still in its early stages. Budding technologies such as blockchain and other distributed ledger technologies (DLT) are accelerating the crowdfunding trend by democratizing the world of finance as a whole and bridging the otherwise fragmented and highly restricted financial ecosystem. The rise of internet usage and its complexity of application are granting real estate investors around the world access to opportunities often suppressed by outdated technology, heavy minimum capital investment restrictions, and the lack of access to financial and economic data. Security Token Advisors have been helping leaders in real estate understand and apply the concept of digitization to their business.

The most powerful and disruptive features of digitization can only be powered by security tokens. Security tokens (ie. digital securities) use blockchain technology to help reinvent the process of managing liquidity, administrating stock ownership, paying out dividends, and much more. In early 2019, security token offerings (STOs) began to take the stage as a hot new opportunity for international crowdfunding in capital markets. Quickly, alternative trading systems (ATS) like tZERO (a subsidiary of Overstock.com), digital asset management platforms like Vertalo, and transfer agents like Securitize, ramped up efforts to become key players in the security token industry, raising over $790M in total funding for digital securities infrastructure throughout the year. Since the boom of security token infrastructure investment in 2019, enterprising entrepreneurs and creative startups have taken advantage of the infrastructure that has been built. This has led to a wave of investors rushing in to tokenize securities in various asset classes. From growing startups to venture capital funds, regional hotels, and individual houses, the race to tokenize has begun. Today, in the real estate industry alone, the market capitalization of tokenized securities tops $27M — just a tiny fraction of the total asset class.

Introducing BlokHaus Real Estate Technologies

Security tokens are a universal technology, with firms popping up all around the world. Locally, in our backyard, Miami is considered one of the leading real estate cities in the world. Now, a real estate broker-dealer turned fintech platform based in Miami, FL, is poised to be a key player in tokenizing South Florida’s highly sought-after real estate market. With “South Florida’s Real Estate Officially in Super-Boom Mode” according to the headline of an article by Peter Taylor on Forbes, there may be no better time and place to participate in the digitization of real estate investments. After working closely with the Blokhaus team for over six months, the Security Token Advisors team is proud to announce its partnership in the launch of Miami’s first real estate tokenization platform, BlokHaus. Riding off of the success of the brokerage branch of the parent company throughout Miami’s continued real estate boom, BlokHaus is preparing the city for the second wave of real estate innovation.

The company’s vision is to “Democratize real estate by providing liquidity solutions through asset digitalization”. This aligns with their mission to “Implement fintech into real estate services by offering investment opportunities and fractional ownership through security tokens”. Of this news, Juan Alvarez, the Founder and CEO of BlokHaus says “We firmly believe in democratizing commercial and residential real estate by using fintech to allow fractional ownership. Through this process, we can now forge access for anyone to own a stake in our proprietary investment portfolio of the most attractive assets driven by returns paid through security tokens”. And this was followed up by Salomon Abauat, Head of Blockchain at BlokHaus who said, “We are proud to announce that we’ve founded the first Miami-based Fintech Real Estate brokerage operating on the Blockchain, which is revolutionizing the way real estate is being transacted with complete disintermediation resulting in endless investment opportunities”.

The platform will be using leading tokenization providers and transfer agents to power their digitization movement alongside the help of top legal counsel to make sure investors are protected and covered in their investments to the same degree that they are used to in traditional markets.

BlokHaus represents what we believe is the future of Miami’s real estate market and the future of the global real estate industry. Learn more about the opportunity to invest in the next wave of digital finance for real estate investments by visiting www.BlokHausRe.com or join us on Clubhouse on April 30th at 5pm EST to talk about the opportunity for LATAM Investors to access real estate through security tokens. Spanish edition to follow on Wednesday, May 5th, at 5pm EST and the Portuguese edition on Thursday, May 6th, at 5pm.

The First Real Estate Tokenization Platform in Miami Has Launched was originally published in Security Token Group on Medium, where people are continuing the conversation by highlighting and responding to this story.

It’s officially a new quarter and a new year, so we’ve got the latest round-up of investments into Security Token Infrastructure from the previous quarter below.

The punchline: Roughly $87,000,000+ was directly invested in Q4, with an emphasis on general infrastructure and early-to-mid stage venture capital. More impressively, the industry has surpassed $1 Billion in investments into infrastructure, a sign that the industry is here to stay and has massive betting power behind it.

This quarter’s larger transactions include multiple exchanges including Archax in London and StartEngine in the US. We also saw numerous infrastructure companies raise capital including several funds such as DraperGorenHolm and Morgan Creek Capital.

Back from the dead! Neufund, a German fintech founded in 2016, is on a mission to connect capital seeking startups with retail investors, VCs, and angel funds. Despite facing issues with regulatory uncertainty that forced the firm to halt its tokenized equity offerings mid-2020, Neufund announced the closing of a €4,000,000 raise in a Series A round led by early-stage venture capital investment firm Atlantic Labs on December 14th, 2020. Proceeds from this raise will be used to help Neufund obtain the necessary financial licensing to expand on the company’s operations, to accelerate the development of products and services, and to make new hires. Having previously secured a few million in funding in 2018, this Series A round now gives Neufund a new wave of confidence going into 2021. Sitting on a fresh round of capital to pursue financial licensing, NeuFund is ready to participate in the security token industry again.

Recognizing that Q3 2020 showed no signs of a slowdown and even saw a doubling in security token infrastructure investment despite the economic downturn, Q4 was an even more progressive quarter for new capital entering the space. A substantial quarter for infrastructure investment may just be an early signal for a massive pick-up in investment to take place in early 2021. On top of gains in infrastructure investments in Q4, the quarter saw many successful STOs and other listings from top players in the space. New regulation concerning the financial sector’s interaction with digital securities and blockchain technology continues to advance early in the year and may even catalyze the growth that innovators have been predicting for years as the industry matures in 2021. Expect a similar-sized Q1 infrastructure investment report in 2021 folks!

As always, we will continue to update this list as we find new information. Our last update was on February 8th.

Read the Q3–2020 Market Report Here

Read the Q2–2020 Market Report Here

Read the Q1–2020 Market Report Here

Read the 2019 Quarterly Reports Here

Issuance Platforms

Neufund, Germany — €4,000,000 raised by 4 investors and led by Atlantic Labs and Udo Schloemer in a Series A investment round.

Exchanges

StartEngine, Los Angeles — $18,900,000 raised in an equity crowdfunding round

Archax*, London — $8,000,000 raised by a number of crypto VC firms in a seed investment round

Other Security Token Infrastructure Companies

Draper Goren Holm, Los Angeles — $25,000,000 raised for its traditional venture fund, Fund 1

SEBA Bank, Zug — $22,500,000 Series B financing round

Curv, Israel — $6,200,000 in a Series A round led by Franklin Templeton and Illuminate Financial

Upvest, Germany — €5,000,000 raised in a Series A round led by Earlybird Venture Capital

Dusk Network, Netherlands — acquired a 10% stake in Nederlandsche Participate Exchange (NPEX) for undisclosed amount

ICO, Crowdfunding or FinTech Companies Also Offering STO Services**

Morgan Creek Capital Management — $71,000,000 raised for the second Morgan Creek Blockchain Opportunities Fund

Acquisitions

Securitize, San Francisco — FINRA registered ATS Distributed Technology Markets (DTM) acquired for an unknown amount

INX — OpenFinance Network acquired

Currently fundraising category (notable mentions):

CoinLinked — $5,000,000

We will continue to update this list with missing information about Q4. Stay tuned and subscribe to see the Q1 report in April!

*Also does issuance.

**Not applied towards the total investment into Security Token Infrastructure due to some of the capital being invested towards non-security token infrastructure.

The State of Investment into Security Token Infrastructure — Q4 2020 was originally published in Security Token Group on Medium, where people are continuing the conversation by highlighting and responding to this story.

The largest private banks in the world have been exploring new fintech solutions like security tokens and blockchain for the past few years. Startups often provide the source of innovation for big corporations, but that hasn’t stopped the 39 below members of the top 100 largest banks in the world from pioneering themselves. Most notably, 7 of the 10 largest banks have publicly announced initiatives. Check out the list below to see which of the world’s largest banks are working on security tokens and blockchain!

Central Bank Digital Currencies (CBDCs) are also being tested and implemented by central banks around the world — check out the full list here.

The following list of top 100 banks (according to Wikipedia) are working on security tokens and blockchain. This list was last updated on December 2nd, 2020.

#2. 🇨🇳 China Construction Bank ($3.6 Trillion in AUM)

Research Began: Although the Chinese government has been critical of digital currency, once blanket banning cryptocurrencies in 2017, the recent DCEP initiative from China's national government demonstrates a move towards the acceptance of new financial technology such as digital securities. This has led major banks across China to explore security tokens and blockchain applications, including the second-largest bank in the world, China Construction Bank.

Applications: Most recently, in November 2020, China Construction Bank had announced a partnership with Fusang to tokenize $3 Billion worth of tokenized bonds, but canceled the sale shortly before going live.

View on Security Tokens/ Blockchain: The Chinese government is consistently wavering in its position on digital currencies since its initial banning of Bitcoin. The Chinese Construction Bank announced a halt of its digital bond sale due to heightened scrutiny.

#4. 🇨🇳 Bank of China ($3.2 Trillion in AUM)

Research Began: The Bank of China must have been even more closely prepared than the CCB because they launched its own $2.8 Billion dollar tokenized bond at the beginning of 2020.

Applications: The Bank of China is using a blockchain-based solution to issue loans to small and micro-sized businesses to support their continued growth in the economy.

View on Security Tokens/ Blockchain: No public comments from the bank about blockchain were found, but in an article about the Bank of China’s related projects, a reporter wrote: “According to statistics, as of the end of September 2019, China Banking and Insurance Trust has cooperated with a number of insurance companies in electronic insurance policy custody, accumulating more than 4 million electronic insurance policies in custody, and has added more than 300,000 new custody per month since the beginning of this year”.

#5. 🇯🇵 MUFG ($2.9 Trillion in AUM)

Research Began: On November 7th, 2019, Mitsubishi UFJ Financial Group, Inc. (MUFG) announced the establishment of its “ST Research Consortium” and its aim to develop next-generation financial transaction services using blockchain technology. Before that, the bank invested in Securitize, a leading tokenization and issuance platform.

Applications: The hope is to offer infrastructure that enables the seamless and automatic settlement of securities and funds. The consortium set out to protect investors’ rights throughout the process. Most notably, MUFG recently announced a move to create a digital token to be used as a stablecoin.

View on Security Tokens/ Blockchain: Japan has announced various initiatives involving blockchain and digital currency over the past few months alone. So far, regulators have taken the approach to support the commercial industry as it self regulates.

#6. 🇬🇧 HSBC ($2.7 Trillion in AUM)

Research Began: In November of 2019, HSBC announced that it would move to settle $20B worth of assets to a new blockchain-based custody platform by March 2020.

Applications: HSBC’s platform, known as Digital Vault, is set to allow investors to access real-time records of securities purchased on private markets. Although no clear updates on this development have been released, it is clear that the bank has been preparing for a move to digital securities and has expected an increase in the demand for related services for over a year now.

View on Security Tokens/ Blockchain: The bank is actively exploring blockchain and security token applications for payment versus delivery, clearing and settlement, and digitization.

#7. 🇺🇸 JP Morgan Chase ($2.7 Trillion in AUM)

Research Began: JP Morgan Chase, one of the largest banks in the United States, announced the creation of a Digital Coin to enable the instantaneous transfer of payments between institutional clients.

Applications: The multinational investment bank further discloses that the Coins are sent over a blockchain network for money movement and for payment in securities transactions. Though the announcement describes the Digital Coin as a prototype, the bank also itself as the first U.S. bank to successfully test a digital coin of its nature. Most recently, J.P. Morgan made a deal with blockchain firm ConsenSys to sell off its Quorum blockchain platform.

View on Security Tokens/ Blockchain: On its official website, J.P. Morgan writes, “We have always believed in the potential of blockchain technology and we are supportive of cryptocurrencies as long as they are properly controlled and regulated. As a globally regulated bank, we believe we have a unique opportunity to develop the capability in a responsible way with the oversight of our regulators. Ultimately, we believe that JPM Coin can yield significant benefits for blockchain applications by reducing clients’ counterparty and settlement risk, decreasing capital requirements and enabling instant value transfer”.

#9. 🇫🇷 BNP Paribas ($2.7 Trillion in AUM)

Research Began: On September 15th, 2020 BNP Paribas Securities announced a partnership with financial technology company Digital Asset to create blockchain/DLT applications.

Applications: The applications or dApps will be used for real-time trade and settlement. The bank claims that even clients that have not integrated with their DLT platforms to make use of real-time workflows.

View on Security Tokens/ Blockchain: In its report on the partnership, Luc Renard, BNP Paribas Securities stated: “We believe that DAML has the potential to emerge as a new standard for international capital markets”. Recently, the bank partnered with leading tokenization and issuance platform, Tokeny, and chose the Ethereum and Tezos blockchains for use.

#10. 🇫🇷 Crédit Agricole ($2.2 Trillion in AUM)

Research Began: In 2017, Crédit Agricole announced its investment in a financial blockchain specialized fintech, SETL, and its experimentation with blockchain to further its efforts in digital innovation.

Applications: The bank disclosed that it is working to speed up the digitalization of its processes and exchanges with clients. The bank also raised awareness on innovation through presentations, workshops, and an innovation fair on topics such as blockchain, open banking, and smart data.

View on Security Tokens/ Blockchain: Although public mentions of Crédit Agricole’s views on security tokens/blockchain are hard to find, the bank's investment in a blockchain-native fintech indicated a move towards adoption using vertical integration.

#13. 🇺🇸 Citi Group ($1.9 Trillion in AUM)

Research Began: On March 10th 2020, ConsenSys announced a collaboration with Citi to modernize commodity trading using blockchain technology.

Applications: The Ethereum-based Komgo platform helps to simplify, secure, and standardize operations across the international trade finance industry with new solutions like digitized letters of credit. Komgo has been working with Consensys to address challenges such as paper-based processing, delayed transaction settlement, and fragmented record keeping and much more since the beginning of their partnership.

View on Security Tokens/ Blockchain: As one of the largest global trade finance banks in the world, Citi has publicly declared blockchain technology as a way to potentially influence human behavior and that its relationship with Komgo and ConsenSys has helped to solidify this viewpoint within the company.

#15. 🇯🇵 Mizuho Financial Group ($1.9 Trillion in AUM)

Research Began: Japanese banking group Mizuho announced experimentation with blockchain for use in trade finance as early as July 7th, 2017. On September 25th, 2017, the firm also a partnership with conglomerate Hitachi to develop a blockchain platform for supply chain management.

Applications: Mizuho claimed to be examining the utility of blockchain for currency settlement and distributed record-keeping to offer faster delivery times and increased transparency. The ultimate goal is to develop a record of every transaction that can be accessible by anyone in the company, thereby streamlining the process needed to order an item. Recently in November 2020, Mizuho joined MUFG on its Digital Yen stablecoin project.

View on Security Tokens/ Blockchain: Mizuho Financial Group has been experimenting with blockchain since 2017 and has continued to show progress in its developments in the industry. In a statement, the bank claims that “Mizuho aims to further explore the practical business application of blockchain / DLT and to offer technologically sophisticated, client-focused services going forward”.

#16. 🇪🇸 Banco Santander ($1.8 Trillion in AUM)

Research Began: On September 13th, 2019, Spanish multinational financial company Banco Santander announced its issuance of a $20M dollar end-to-end blockchain bond.

Applications: Santander revealed that it issued the $20M bond directly on the public Ethereum blockchain where it will remain until the end of its one-year maturity. Both the money used to complete the transfer and the quarterly tokens were tokenized. John Whelan, head of digital investment banking at Santander, explained that the (tokenized) cash was held “in escrow in a smart contract on the public Ethereum blockchain until the issuer had underwritten the transaction and instructed the blockchain to perform the delivery versus payment”. The bank also invested in Securitize in 2019.

View on Security Tokens/ Blockchain: Santander is claiming to be the first to complete a digitized, automated, and on-chain process for the issuance of a bond. Banco Santander revealed that in the bond issuance to itself, the transaction was faster, more efficient, and simpler than legacy systems.

#17. 🇫🇷 Société Générale ($1.5 Trillion in AUM)

Research Began: On April 23rd, 2019, French multinational investment bank and financial services company Société Générale announced its issuance of the first covered bond as a security token on a public blockchain.

Applications: The bank has been actively working with several banks and the Central Bank of France (Banque de France) on its tokenized bond projects and is considered one of the most active security token using banks in Europe.

View on Security Tokens/ Blockchain: Société Générale reports that the company has been involved with several initiatives involving blockchain and Distributed Ledger technologies for many years including platforms like we.trade and Komgo and is considered a fierce advocate of the technology, including selecting Ethereum and ConsenSys as partners.

#18. 🇬🇧 Barclays ($1.5 Trillion in AUM)

Research Began: On July 19th, 2019, Barclays released a report on how the British multinational investment bank is exploring blockchain technology. In the report, Barclays reveals that it started exploring how to leverage the technology over four years prior to its release.

Applications: Although Barclays does not reveal any details about future products and services using blockchain technology, the bank is exploring methods of simplifying processes and removing inefficiencies across the industry.

View on Security Tokens/ Blockchain: Barclays does reveal that it sees the real value of blockchain in its ability to make substantial improvements to data processing through automated coordination, which Barclays believes may lead to billions in industry savings. Nicole Sandler, Head of Innovation Policy at Barclays stated, “We see our role within the blockchain ecosystem as not only an innovator pushing the technology forward, but as an incumbent using our experience to ensure that every use case is fit for purpose and safe for clients, customers and wider society”.

#21. 🇩🇪 Deutsche Bank ($1.4 Trillion in AUM)

Research Began: On October 11, 2019, Deutsche Bank announced the successful tokenization of a bond on the EOS blockchain.

Applications: The tokenized bond, dbond, is a high-quality USD nominated bond of Deutsche Bank AG and is locked within custody until the maturity time. The bond uses a stablecoin developed by Depos Technologies to maintain its peg to the dollar. Deutsche Bank

View on Security Tokens/ Blockchain: Although Deutsche Bank does not regularly mention its use of blockchain for the tokenization of securities or other applications, the public announcement of the digital bond in 2019 may signal that the bank is privately working on solutions that involve the nascent technology.

#23. 🇨🇦 Royal Bank of Canada ($1.1 Trillion in AUM)

Research Began: On September 27th, 2017, Royal Bank of Canada (RBC) announced its experimentation with blockchain to help move payments between its U.S. and Canadian banks.

Applications: The bank developed a system at an RBC blockchain technology center in Toronto using IBM’s Hyperledger. The technology was integrated into RBC’s existing systems to enable a “shadow ledger” that tracks payments going to and from Canada and the U.S. The system was developed to prove RBC’s leadership in the space and to reveal the potential efficiencies of utilizing blockchain technology in cross-border payment flows.

View on Security Tokens/ Blockchain: Martin Wildberger, RBC’s executive vice president of innovation and technology, said that the use of distributed ledger technology, or DLT, would improve the speed of payments, reduce complexity and lower costs. Acknowledging the previously mentioned blockchain technology center in Toronto, it is likely that the bank will continue to consider blockchain in many of its efforts for innovation.

#24. 🇬🇧 Lloyds Banking Group ($1.1 Trillion in AUM)

Research Began: On June 3rd 2019, Loyds Banking Group was announced to be a partner in a UBS-led group to create a “utility settlement coin” using blockchain technology.

Applications: The group of banks will use a permissioned blockchain system that will allegedly make cross-border transactions much faster and less risky. The token in the system will work as both a payment device and as a messenger that carries the information needed to execute a trade.

View on Security Tokens/ Blockchain: Since Lloyd’s Banking Group has only openly disclosed its involvement with the collective of banks for the UBS-led project, the company’s views on the blockchain are difficult to find. Hesitancy to announce its experimentation with the technology may suggest that the company is evaluating blockchain and security tokens with prudence.

#29. 🇳🇱 ING Group ($1 Trillion in AUM)

Research Began: On June 21st 2019, ING, a Dutch multinational bank and financial services company, released a report about asset tokenization and the future of capital markets. In the report, the bank discusses the opportunities and challenges that come with the adoption of blockchain technology.

Applications: ING has not revealed any specific details about their use of blockchain technology, but the bank’s strong interest and understanding of the potential for security tokens may indicate that the bank will release more information as regulatory clarity becomes a global standard.

View on Security Tokens/ Blockchain: In the report, Carlos Cocuzzo, Economist, Digital Finance at ING stated, “Finance is the business of trust. Without trust, an investor is unlikely to engage in a transaction”. Ultimately, ING sees blockchain technology as a potential way to improve transparency and therefore trust in financial and capital markets.

#30. 🇺🇸 Goldman Sachs ($990 Billion in AUM)

Research Began: In October 2018, SeedInvest was acquired by Circle, founded in 2013 by investment banking and management giant Goldman Sachs. It is rumored that Circle acquired the FINRA fundraising platform to later issue security tokens.

Applications: Although no details about the acquisition have been released, Circle’s acquisition of SeedInvest may suggest that the fundraising platform will eventually make use of security tokens and blockchain technology.

View on Security Tokens/ Blockchain: Goldman Sachs was most recently noted for releasing 5 reasons why cryptocurrencies including Bitcoin are not an asset class in the spring. This was shortly followed by Goldman Sachs’s announcement of a new head of digital assets in August which suggests that the multinational investment bank is moving to further explore security tokens and blockchain technology, as well as cryptocurrencies.

#33. 🇨🇭UBS ($970 Billion in AUM)

Research Began: On June 3rd, 2019, Paul Vigna from the Wall Street Journal announced that the UBS-led consortia were set to launch a blockchain-based trade-settlement platform. On October 9th, 2019, UBS announced its commencement of full-fledged transactions on we.trade, a blockchain-based trade finance platform.

Applications: UBS utilizing we.trade for trade settlement may suggest the firm is looking to use the blockchain-based platform to settle international transactions with other we.trade users including Société Générale, HSBC, Santander, UniCredit, Nordea, KBC, Rabobank, and Deutsche Bank.

View on Security Tokens/ Blockchain: The chief executive officer of the Swiss banking and financial services giant UBS Group AG (UBS), Sergio Ermotti, believes that the blockchain technology underlying the cryptocurrencies is “definitely an opportunity” in the long term, according to CNBC. Acknowledging UBS’s active efforts to collaborate with multiple of the other multinational banks on this list, it is no secret that UBS sees a bright future for the industry.

#36. 🇬🇧 NatWest Group ($950 Billion in AUM)

Research Began: On March 26th, 2019, NatWest Group, a majority state-owned British multinational banking and insurance holding company, announced its collaboration with CurveBlock to hold a security token offering after NatWest accepted the company into its commercial bank accelerator program.

Applications: NatWest Group is accelerating CurveBlock to create their own STO offering as the company goes on to provide ecologically and sociologically responsible support to low-income housing needs.

View on Security Tokens/ Blockchain: NatWest Group publically announced its collaboration with CurveBlock to indicate that the company is paying close attention to what is happening in the space. Although comments about this partnership and other blockchain experiments are difficult to come across, Gary Woodhead, CEO of CurveBlock stated, “Banks have always been the stumbling block at the early stages in real estate development. CurveBlock is removing banks from this chokepoint by being a fully liquid company that can take advantage of all opportunities, regardless of whether banks are loaning money or not. We are happy to partner with NatWest bank for the sales side of development”.

#39. 🇺🇸 Morgan Stanley ($890 Billion in AUM)

Research Began: On June 15th, 2017, Morgan Stanley stated “governmental acceptance would be required for this to further accelerate, the price of which is regulation,” indicating that the American multinational investment bank has been researching blockchain and cryptocurrencies as early as 3 years ago.

Applications: In 2018 Morgan Stanley was reported to be among the first to use the freshly launched CLSNet alongside banking giant Goldman Sachs. CLSNet is used to help international organizations solve the problem of payment vs. delivery in international trade.

View on Security Tokens/ Blockchain: Most recently, Morgan Stanley Investment Management’s chief strategist and head of emerging markets recommended Bitcoin as an alternative investment to stocks amid loose central banking monetary policy but has not alluded to using security tokens within the bank itself.

#40. 🇨🇦 Scotiabank ($870 Billion in AUM)

Research Began: On March 2nd, 2017, AlphaPoint, a fintech company focused on blockchain technology announced its completion of a successful proof of technology with one of Canada’s Big Five banks, Scotiabank.

Applications: No details about the success of the trial were released to the public, but fintech AlphaPoint enables firms to digitize financial instruments on its platform where Scotiabank may execute and manage trades using blockchain technology.

View on Security Tokens/ Blockchain: In 2018, Henry Kesisyan, Scotiabank’s head of blockchain, claimed that “the financial services sector is set to ramp up implementation of blockchain applications in 2019,” indicating the bank’s views on the future of the nascent technology. He also added, “We’re a very large bank in the gold space, so everything from the gold being mined right through getting into the vault and the settlement, being able to track that across a blockchain, that’s something we’re looking at”.

#41. 🇨🇭 Credit Suisse ($810 Billion in AUM)

Research Began: On September 19th, 2019, Credit Suisse published an article about blockchain with Professor Fabian Schär, Managing director and professor at the Center for Innovative Finance (CIF), University of Basel. On February 20th, 2020, Credit Suisse claimed bragging rights for the first live blockchain-based settlement of U.S. equities in collaboration with NYDFS regulated fintech Paxos.

Applications: The Paxos Settlement Service allows the simultaneous exchange of cash and a select number of U.S.-listed securities on the firm’s private version of Ethereum.

View on Security Tokens/ Blockchain: Head of digital asset markets at Credit Suisse, Emmanuel Aidoo, said in a statement: “Paxos Settlement Service introduces blockchain technology that’s compliant with regulations and allows us to take important strides towards evolving market structure and unlocking capital that is tied up in legacy settlement processes”.

#44. 🇬🇧 Standard Chartered ($720 Billion in AUM)

Research Began: According to a report on Newage released on August 16th, 2020, British multinational bank, Standard Chartered conducted its first blockchain trade in Bangladesh.

Applications: Standard Chartered issued a Letter of Credit (LC) for the trade between two garment exporters on the Contour blockchain network. The entire transaction was reported to be completely digitally on the R3-baed Countour network.

View on Security Tokens/ Blockchain: In the Newage report, Standard Chartered Bank, Bangladesh CEO Naser Ezaz Bijoy stated: “We are extremely proud to introduce blockchain technology in Bangladesh for trade transactions. It has been a privilege to partner with Viyellatex Group to initiate the first Blockchain enabled Letter of Credit in the country. We are very excited to offer our clients improved speed and reduced risks of settlement offered by platforms such as Contours”.

#45. 🇦🇺 Commonwealth Bank ($680 Billion in AUM)

Research Began: On July 4th, 2019, Australian multinational bank, Commonwealth Bank announced its launch of a pilot with ANZ, IBM, Scentre Group, and Westpac using a new blockchain-based system, Lygon, to manage bank guarantees.

Applications: The Lygon platform is operated by Lygon 1B Pty Ltd and is used to digitally issue bank guarantees, reducing the typical timeline for this process from up to a month to around the same day.

View on Security Tokens/ Blockchain: Michael Thorpe, Managing Director, Future Cities, Institutional Banking and Markets, Commonwealth Bank stated: “Commonwealth Bank has a strong track record of collaborative innovation using blockchain technology. This pilot is a co-operative industry approach to explore the use of blockchain technology to revolutionise bank guarantees, making the process simpler, easier and more transparent for our business customers — we are simplifying document exchange, using real time monitoring and speeding up the issuing process. While the pilot is focussed on retail property leasing, the digitisation of bank guarantees can benefit many other industries and geographies where bank guarantees, or standard letters of credit, are used”

#47. 🇨🇦 Bank of Montreal ($660 Billion in AUM)

Research Began: On August 15th, 2018, BMO Capital Markets announced a first-of-its-kind blockchain pilot to issue a fixed income transaction with investment banking company Bank of Montreal.

Applications: The pilot transaction was booked as a traditional Canadian Depository for Securities (CDS) issuance and successfully paralleled through the blockchain. It was conducted to demonstrate how smart contracts and blockchain could be used for fixed income markets.

View on Security Tokens/ Blockchain: Although no public comment from Bank of Montreal can be found, Audrey Gaspar, Ontario Teachers’ Managing Director, Treasury and Integration stated: “Ontario Teachers’ is committed to exploring technology and innovations that might improve our ability to serve our members”. “We are pleased to partner with Bank of Montreal in this pilot blockchain initiative”.

#48. 🇳🇱 Rabobank ($660 Billion in AUM)

Research Began: On April 14th, 2020, Rabobank announced the completion of a cross-continent commodity trade transaction from North America to Southeast Asia using a blockchain platform alongside Agrocorp and privately held global food corporation Cargill.

Applications: Rabobank disclosed that the use of consensus-driven smart contracts for the transaction and helped reduce the time spent on processing documents by more than half.

View on Security Tokens/ Blockchain: After the transaction, Rabobank’s key facilitators, Mario Cortinhal in North America and Olivier De Jong in Singapore revealed that they were able to minimize the time spent on processing documents due to the effectiveness of consensus-driven smart contracts.

#49. 🇦🇺 Australia & New Zealand Banking Group ($660 Billion in AUM)

Research Began: On December 12th, 2015, Australia & New Zealand Banking Group (ANZ) announced its collaboration with tech giants and financial institutions to explore how blockchain technology may potentially replace today’s international financial infrastructure using IBM’s Hyperledger.

Applications: It is reported that in the project each firm will offer each other intellectual property and resources to create its own blockchain with Hyperledger. The group claimed that the aim of Hyperledger was to develop a framework whereby entities can transfer assets of any kind between themselves.

View on Security Tokens/ Blockchain: In 2017 Nigel Dobson, GM of Wholesale Digital at ANZ stated: “We have been keen to avoid the hype surrounding blockchain and distributed ledger technologies, and instead focused on practical and deliverable use cases,” after the announcement of a successful blockchain-based trial with IBM.

#51. 🇫🇮 Nordea ($620 Billion in AUM)

Research Began: On May 9th, 2019, European financial services group Nordea announced a successful launch with we.trade.

Applications: Nordea is using the blockchain-based we.trade platform to simplify the order process through a controlled set of rules that enhances security throughout the process. we.trade is constructed on the IBM blockchain platform and was jointly developed by many of the previously mentioned banks.

View on Security Tokens/ Blockchain: In a press release about Nordea’s involvement with we.trade, head of Business Banking, Magnus Montan stated: “We see more and more small and medium sized companies getting involved in cross border trading. There are some common challenges that they face. The biggest one is related to trust in their overseas trading partners. we.trade is not only about providing trade finance, it is something much bigger than that. It is about enabling trade and with we.trade we are creating an ecosystem for the global trade, where trust is an integral part”.

#57. 🇯🇵 Sumitomo Mitsui Trust Holdings ($500 Billion in AUM)

Research Began: On December 12th, 2018, Japanese financial holding company Sumitomo Mitsui Trust Holdings released a notice regarding the commencement of Proof of Concept utilizing blockchain technology in Real Estate with one of its subsidiaries.

Applications: The bank disclosed that it aims to maintain and ensure the transparency of information on real estate transactions and to expand business opportunities for real estate owners and investors. Nordea claimed to

View on Security Tokens/ Blockchain: In the report, Nordea stated: “Blockchain is a new technology expected to be effective for preventing tampering with information and improving transparency. SuMi TRUST Bank [Nordea’s subsidiary] will examine to develop a fair and highly transparent information management method, which will contribute to attract potential participants and create more business opportunities in real estate transactions”.

#62. 🇩🇪 Commerzbank ($470 Billion in AUM)

Research Began: On August 8th 2019, German bank Commerzbank announced its development of a blockchain-based solution for machine-to-machine payments.

Applications: Commerzbank has partnered with companies like Daimler Trucks to successfully settle machine-to-machine payments on a blockchain.

View on Security Tokens/ Blockchain: Stephan Müller, Head of Transaction Banking, Commerzbank AG stated: “After we have completely digitized securities transactions in particular in previous pilot projects and processed them using blockchain technology, we are now focusing on DLT-based payment structures. Because, as a bank, we naturally also see our mission in creating new digital payment architectures for our customers”.

#67. 🇯🇵 Nomura Group ($420 Billion in AUM)

Research Began: On May 15th, 2018, Nomura Group announced its establishment of Komainu alongside partners to overcome barriers to institutional investment in digital assets.

Applications: On November 5th, 2020, Nomura published research findings on its use of blockchain technology in financial markets. In the report, Nomura Group highlights the use of security tokens as a funding tool. The bank also invested in Securitize in 2019.

View on Security Tokens/ Blockchain: In 2018, Jez Mohideen, Global Chief Digital Officer Wholesale at Nomura stated: “Global investment managers have long been held back from full participation in digital asset markets, limited by operational and regulatory risk. Our new partnership will set the required standards that will bring peace of mind to digital asset investors, and provide tools and products to enable better integration with more traditional investment vehicles such as mutual funds”.

#71. 🇧🇷 Itaú Unibanco ($407 Billion in AUM)

Research Began: On December 3rd, 2018, Reuters released a report about Itaú Unibanco’s collaboration with Standard Chartered to launch a blockchain platform for loans.

Applications: The syndicated loan took place on the R3-developed Corda, a permissionned blockchain platform for digital identity and transaction settlement.

View on Security Tokens/ Blockchain: In a joint statement about the collaboration, the banks stated: “The use of blockchain in the banking industry is expected to reduce the risk of fraud in financial transactions, as well as cut down complexity and costs”.

#73. 🇺🇸 Bank of New York Mellon ($381 Billion in AUM)

Research Began: In February 2020, Bank of New York Mellon (BNY Mellon) released a report on the benefits of digitizing assets using blockchain where it lists 5 reasons to tokenize assets.

Applications: Although few details about BNY Mellon’s blockchain projects are publicly available, in its report the bank stated: “As one of the world’s largest custodian overseeing $37.1 trillion as of Dec. 31, 2019, the bank has a series of tokenization development projects under way to learn about different use cases, any risks to its adoption and what marketplace frictions it can remove for clients. For example, the bank is working to issue bonds and syndicated loans on a digital ledger”.

View on Security Tokens/ Blockchain: Head of digital partnerships at BNY Mellon, Lucien Foster stated: “This is the evolution of money. We’re going from the old days of stock certificates being run across Wall Street to digital tokens that can be moved and settled with a keystroke”.

#75. 🇰🇷 Nonghyup Bank ($370 Billion in AUM)

Research Began: On September 29th, 2020, South Korean Nonghyup Bank announced its launch of a blockchain-powered document wallet for authentication.

Applications: Nonghyup Group announced that its blockchain platform would be used to issue digital certificates for more than 300 types of documentation. The bank also revealed that its blockchain-powered system will allow customers to do away with paper-based document submission processes to prove identity online.

View on Security Tokens/ Blockchain: Nonghyup Bank states that it planned to expand its blockchain-powered e-wallet’s infrastructure “within 2020” and claimed that “public institutions and other financial institutions” would also be able to accept the digital certificates as valid forms of authentication.

#76. 🇸🇬 OCBC Bank ($365 Billion in AUM)

Research Began: On July 23rd, 2019, UionBank announced its use of a blockchain-based version of tokenized fiat for an account-to-account cross-border transaction in collaboration with OCBC Bank.

Applications: The project uses the Adhara blockchain platform which allows for real-time international payment and liquidity management and is a permissioned Ethereum platform that uses tokenized fiat and smart contracts.

View on Security Tokens/ Blockchain: No public comments from OCBC bank were found, but, Julio Faura, CEO Adhara stated: “We are very excited to work with UnionBank and OCBC on this pilot, which demonstrates how tokenization and blockchain can make international payments and liquidity management fast and efficient for different market segments, providing competitive prices dynamically in real time while fully complying with existing regulations and supervisory requirements”.

#78. 🇰🇷 Hana Financial Group ($365 Billion in AUM)

Research Began: In 2015, South Korean Bank Hana Financial Group announced its joining of the blockchain-enabled R3 consortium to maintain a competitive edge in the financial sector.

Applications: In the report, the company said that it is looking forward to making use of the global blockchain services provided by Corda in its overseas remittance services and security verification processes.

View on Security Tokens/ Blockchain: No comments from Hana Financial Group were found, but, the bank intends to pass on the benefits of blockchain to its clients by lowering their banking fees. If the project goes according to the plan, Hana Financial Group will be fully implementing the blockchain technology to stay on par with other banks that are part of the consortium.

#85. 🇰🇷 Woori Bank ($313 Billion in AUM)

Research Began: On September 22nd, 2020, Fund Block Global announced a partnership with Woori Global Asset Management to develop a ‘blockchain-based digital real estate fund service’.

Applications: The blockchain platform is said to be an innovative financial service that converts real estate funds into digital assets with blockchain technology and sells and distributes these funds to ordinary investors without any intermediary participants.

View on Security Tokens/ Blockchain: Dongho Kim, CEO Woori Global Asset Management stated: “Using the transaction integrity of the blockchain through digital real estate fund services, the fund is transparently and securely managed to establish an innovative financial service that allows ordinary investors to easily transact without restrictions on time, place, and amount. “In addition, we will accelerate our entry into the global market by preoccupying the sales and distribution markets of publicly offered real estate funds through the digital asset platform and leading the creation of the digital financial industry ecosystem”.

#92. 🇩🇪 Landesbank Baden-Württemberg ($288 Billion in AUM)

Research Began: On June 28th, 2017, Daimler and Landesbank Baden-Württemberg (LBBW) announced the successful execution of a transaction using blockchain technology.

Applications: Daimler and LBBW do not disclose the full details of their collaboration, but jointly stated that “blockchain will increase the automation of financial transactions so that they can be concluded much faster and more cost-efficient than in the past,” and “as a result, digital processes will replace labor-intensive manual steps that are so far necessary for processing during the creation of loan contracts and the examination of received payments”.

View on Security Tokens/ Blockchain: In the article that discloses LBBW’s research, Rainer Neske, Chairman of the Board of Managing Directors LBBW stated: “This pilot shows our competence at digitization of financial services for our corporate customers. Technical progress opens completely new ways to make financial processes simpler and more efficient and enables new business models. We want to exploit this potential in order to further improve banking services for our customers”.

#93. 🇦🇹 Erste Group ($275 Billion in AUM)

Research Began: On October 23, 2018, Erste Group announced the successful launch of Europe’s completely blockchain-based capital markets issuance.

Applications: Without fully disclosing the details of the project, the bank claims that “[by] applying blockchain technology to provide issuers and investors with improved efficiency, more transparency and a lower level of operational risk, the platform promises to make Schuldscheindarlehen and similar capital markets products more accessible and their handling more efficient, both for corporate issuers and for institutional investors”.

View on Security Tokens/ Blockchain: In a public statement, Head of Group Markets Origination and Funding Erste Group, Bernhard Leder stated: “We’re very proud to have applied blockchain technology in a way that promises to make Schuldscheindarlehen more attractive to both issuers and investors. By removing the need for manual steps that are labour-intensive, slow and potentially error-prone, our real-world implementation of blockchain can make the issuance of such instruments quicker, simpler and more efficient”.

If you have seen new updates or new top 100 banks launch programs that are not on this list, please leave a comment below and we’ll validate the information and update our list.

If you enjoyed this list, be sure to check out more research and articles at Medium.com/Security-Token-Group. For Security Token market insights visit STOmarket.com. For tokenization consulting visit securitytokenadvisors.com

Biggest Banks in the World Working on Security Tokens & Blockchain was originally published in Security Token Group on Medium, where people are continuing the conversation by highlighting and responding to this story.

A breakdown of what just happened with the CEO token by Curzio Research and why it is so important for the future of finance and digital securities.

Disclosure: Curzio Research is a client of Security Token Advisors (STA) and engaged STA earlier this year to be consulted on the firm’s listing and investor relations strategy.

Curzio Research Lists on MERJ Exchange

On October 29, 2020, Curzio Research listed its Security Token Offering tokens, known as CEO tokens, on the Seychelles-based MERJ Exchange. The CEO tokens represent $4,000,000 USD worth of shares in the company from a financing round in 2019. Upon doing so, the company became the first in the world to be a private United States-based company to list tokenized securities on a foreign public exchange that is open to US citizens and investors from any other recognized jurisdiction around the world.

Issuer Overview

Curzio Research is an emerging leader in the financial newsletter industry and its current model has helped generate more than $6 million in revenue in the first 24 months of operation. In 2019, the Company partnered with Securitize, a token issuance and lifecycle management platform, to complete its digital security issuance and private placement offering to U.S. accredited investors and non-U.S. investors with exemptions under Regulation D and Regulation S of the Securities Exchange Act. The Company raised their financing round almost entirely from its own client base. Upon the passing of the 12-month lock-up period for CEO token holders and upon the receipt of an opinion letter, Securitize (as the acting Transfer Agent to Curzio) removed the restrictions on the stock legend of the CEO Tokens under Rule 144 of the Securities Exchange Act to allow for trading globally to public investors on MERJ Exchange.

Regulatory Explanation

As a private company, Curzio Research leveraged private exemptions to raise capital here in the United States. Under Regulation D, 506(c), the company was able to publicly advertise its private offering and accept US accredited investors. Accredited investors are individuals that qualify under a financial threshold of having at least $1,000,000 in net worth or are earning at least $200,000 per year. In order to also accept investors outside of the United States, the company also had to use the Regulation S exemption to do so. Both exemptions were filed in tandem and both exemptions have lock-up period rules that restrict the transfer of ownership for the securities for one year. In order for the tokenized securities to trade on a secondary market to non-accredited retail investors in the United States, the company also needed to use the Rule 144 exemption to become accessible to non-accredited U.S. investors. Part of this involved having the restrictive legend removed from the security by their transfer agent, Securitize. Curzio Research engaged Digital Securities Law Group in order to get proper and qualified legal counsel to oversee the process as well as work with their very own general counsel who has a securities law background.

Listing Overview

In order for private securities to trade on a secondary market that provides order matching and clearing and settlement services, the secondary market must be registered with its country’s securities regulator. In the United States, only a handful of registered secondary markets are in operation that support security tokens. These secondary markets consist of broker-dealers such as Alternative Trading Systems (ATS) in the United States or Multilateral Trading Facilities (MTF) in the U.K. and Europe.

Alternatively, a security can also be listed on a public exchange like NASDAQ or London Stock Exchange, but the infrastructure and approvals are not yet in place for these markets to support security tokens. Nevertheless, the cost of listing on a major market would also be prohibitive for smaller issuers like Curzio Research.

MERJ Exchange started life in 2011 as part of an IMF backed program to establish a national securities market in the Seychelles. Since then MERJ has developed into one of the most dynamic exchange operators globally, with a market growing faster than any other member or affiliate of the World Federation of Exchanges. A focus on the select use of technology to streamline processes and reduce costs has helped attract $1.7bn of market listings, attracting issuers and investors from all over the world. An IOSCO regulatory model and robust listing framework ensures the highest international standards are in place. Importantly, MERJ has the unique ability to support digital securities from end to end. This presented a welcome solution for Curzio Research to list the CEO tokens on a regulated market, and continue to support the digital experience created by Securitize.

In order to meet the MERJ Exchange listing requirements, Curzio Research appointed Exponential Capital, a North American financial services firm that is also an approved sponsor adviser to MERJ Exchange. Exponential worked with Curzio to ensure that every part of the listing was in line with the exchange’s rules. By going through this process the CEO token has transitioned to a listed security, and consequently widened access to a far broader global audience of institutional and individual investors.

Historical Significance

By listing on MERJ, the CEO tokens became the first tokenized private securities in the world to trade live on a public exchange that retail US investors can also participate in. Up until this moment, it was considered a far cry to remain a private company and still be available for the average Joe and Sally to participate in, an opportunity that was exclusive only to accredited investors. Furthermore, Curzio Research is able to open up access to ownership in its high-growth financial newsletter company to multiple countries around the world thanks to the support and capabilities of MERJ Exchange. And to top it all off, the company was able to do it for considerably less in cost (despite pioneering the process which comes with its own challenges and expenses) compared to having pursued an IPO or public listing in the United States. All of this would not have been possible without security tokens acting as the infrastructure to enable the company to first raise $4,000,000 digitally from investors all around the world and to now list on a foreign exchange. Not to mention, the company did a digital cash dividend using the security token technology last month, another benefit that would not be possible without the use of the blockchain.

Quantifying the Value

Curzio Research has proven to be a model success story and poster child for issuers to learn from and to follow themselves. STA will soon be releasing a case study report with Curzio Research to illustrate in detail the process, regulation, costs, technology, and partners involved in the security token listing process in order to quantify the value in comparison to a traditional public market listing. Meanwhile, trading information on the CEO token from MERJ can be found at STOmarket.com.

Looking for help with the tokenization of your assets or securities? Learn more about how we can help at SecurityTokenAdvisors.com

STA Client Curzio Research Lists CEO Tokens on Exchange Partner MERJ in Historical First for… was originally published in Security Token Group on Medium, where people are continuing the conversation by highlighting and responding to this story.

The year of the security token finishes its third quarter with a roaring response to the previous quarter’s slow pace with DeFi driving the resurgence.

It’s officially a new quarter and we’ve got the latest round-up of investments into Security Token Infrastructure from the previous quarter below.

The punchline: Roughly $14,000,000+ was invested in Q3, with an emphasis on general infrastructure in the space and DeFi services and products. Still, INX successfully raised more than $7,000,000 in the first-ever SEC registered IPO for its security token and cryptocurrency exchange, and will possibly close on maximum raise cap of $134,000,000.

This quarter’s bigger transactions were around other infrastructure companies include a $50,000,000 investment into BlockFi by Morgan Creek Digital, doubling the firm’s previous investment, and solidifying the firm’s confidence in the future of the company. Offering interest-bearing accounts, loans against cryptocurrency, and trading, BlockFi is building the infrastructure and user experience necessary for adoption by the average internet user. Furthermore, issuance platforms saw some traction raising over $6,000,000+ to further develop and commercialize tokenization technology with Digital Debt Markets leading the way in the UK.

Comply Advantage, recently named a World Economic Forum Technology Pioneer 2020, received a $50,000,000 investment from Ontario Teachers’ Pension Plan. Considering the conservative and professional nature of the fund, this marks a unique investment in the world of blockchain and security tokens. Comply Advantage is using machine learning to better prevent money laundering and terrorist financing on behalf of financial service providers. The firm is proving its position in a market for new technologies that address these issues by providing a dynamic global risk database that allows clients to better screen its users.

Regardless of the widely anticipated continuation of the economic downturn, infrastructure investment picked up and more than doubled in Q3. Recent clarifications by the United States Securities and Exchange Commission (SEC) regarding digital asset security trades further signal a seismic shift in sentiment with respect to the future of security tokens. As announcements from international regulatory bodies continue to release information on the new era of digital finance, we expect continued growth of investment and consolidation within the space.

As always, we will continue to update this list as we find new information. Our last update was on October 8th, 2020.

Read the Q2–2020 Market Report Here

Read the Q1–2020 Market Report Here

Read the 2019 Quarterly Reports Here

Issuance Platforms

Digital Debt Capital Markets, U.K. — ~$5,500,000

Dusk Network, Netherlands — $1,000,000 investment by iFinex (Bitfinex)

Black Manta Capital Partners, Germany — Undisclosed amount by COSIMO Ventures and SORS Digital Assets

Exchanges

INX, Gibraltar — $7.5M investment by A-Labs Advisory & Finance

Other Infrastructure Companies

BlockPass, Hong Kong — Undisclosed amount by BnkToTheFuture

BlockFi, San Francisco — $50M investment by Morgan Creek Digital, Winklevoss Capital, Valar Capital, Kenetic, and others.

ComplyAdvantage, London — $50M investment led by Ontario Teachers’ Pension Plan

Celcius, San Francisco — $10M investment in a Corporate Round led by Tether and an $18.8M investment in a Venture Round by undisclosed participants.

Republic*, San Francisco — $16M raised via a Tokenized Note (Republic Note)

We will continue to update this list with missing information about Q3. Stay tuned and subscribe to see the Q4 report in January!

*Also does issuance.

**Not applied towards the total investment into Security Token Infrastructure due to some of the capital being invested towards non-security token infrastructure.

The State of Investment into Security Token Infrastructure — Q3 2020 was originally published in Security Token Group on Medium, where people are continuing the conversation by highlighting and responding to this story.

Security tokens are taking the world by storm and many progressive legislators and regulators have begun defining the lexicon within their jurisdiction’s laws. Over 15 countries have defined the financial instrument with several more on the way. Most countries already have existing securities frameworks that digital securities fall under, but these often don’t specifically define the concept or create a token framework to place securities under. We hope that the pioneering countries below set an example for the rest of the world to follow in order to define security tokens globally.

See missing information on this list? Leave a comment below! This list was last updated on November 10th, 2020.

🇧🇷 Brazil

Passed Legislation: In November 2017, the Brazilian securities regulators (CVM) released an FAQ on token sales on their website.

STO Framework: The classification of virtual tokens as securities would be supported as part of existing law under Article 2, Subsection IX, of Law N. 6.385/1976. This classifies virtual tokens as securities under a similar test as the Howey Test in the US which also determines what qualifies as a security.

Blockchain Views: The CVM has made it possible for ICOs and distributed ledger technology-based tokens to succeed if they can clearly distinguish themselves from being classified as a security.

🇫🇷 France

Passed Legislation: In December 2017, the Blockchain Order was passed to allow for the delivery of securities against payment (settlement) for unlisted financial instruments, paving the way for security token technology.

STO Framework: In March 2020, the AMF of France released a legal analysis dedicated to security tokens. In this document, the AMF has acknowledged security tokens as their traditional counterpart and has declared the need for all the right licenses for financial services providers operating in the industry, including the need for on MTF (Multilateral Trading Facility) license for secondary exchanges.

Blockchain Views: In April 2019, France passed the PACTE law which was aimed at modernizing the financing process for private companies in France and included allowing ICOs as public offerings as a method of fundraising in France. The AMF has shown concerns for decentralized security token exchanges in their legal analysis.

🇯🇵 Japan

Passed Legislation: In May 2019, Japan’s National Diet passed a bill to amend the Act on Settlement of Funds and the Financial Instruments and Exchange Act (FIEA).

STO Framework: The changes to FIEA defines security tokens as “interests in a collective investment scheme that are represented by tokens” and even clarifies that cryptocurrencies used to participate in a security token offering are considered money and, therefore, an investment. The same principles for traditional securities apply to STOs as well, and issuers are required to comply with disclosure requirements such as filing a securities registration statement and ongoing semiannual securities reports. The detailed items to be disclosed are not yet specified. STOs are also required to file under an exemption in Japan.

Blockchain Views: The FIEA does not regulate ICOs other than STOs, i.e., if the token holders do not have the right to receive profit distribution from the issuer, such ICOs are not regulated by the FIEA. Such ICOs may be regulated by the Settlement Act if the tokens fall under the definition of “crypto assets” under the Settlement Act.

🇱🇮 Liechtenstein

Passed Legislation: Legislators passed the Blockchain Act in July 2019, defining security tokens and ICOs into a framework designed to foster innovation in the country.

STO Framework: The bill introduces the Token Container Model which is designed to allow for the tokenization of any asset or right. This progressive model provides legal certainty for pre-existing rights that are tokenized as well as for the information stored on blockchain-based systems. Liechtenstein amended its civil law to allow the token world to have priority over the physical world for the cases where tokens exist for rights and assets.

Blockchain Views: The legislators took a broad approach and referred to the blockchain as transaction systems based on trusted technologies (VT systems) as a way to describe blockchain systems such as Ethereum but also covers distributed ledger technology and potential other use cases. The Liechtenstein government hopes that this use of more abstract terminology will enable them to future-proof and keep the law valid for the next generations of technology and to allow for the flexible interpretation within a light-touch regulatory framework.

🇱🇺 Luxembourg

Passed Legislation: In November 2020, the legislators of Luxembourg passed the Blockchain Bill in order to create a legal framework for the circulation of securities through new secure electronic registration technologies with the aim of enhancing legal certainty in this area.

STO Framework: The Blockchain Bill introduced a new Article 18a into the Law on Securities. This Article regulates holding of securities accounts and registration issues within or through secure electronic registration devices. Article 18a does not explicitly mention the blockchain technologies; nevertheless, blockchain is specifically referenced in the explanatory commentary provided to the Blockchain Bill by its drafters.

Blockchain Views: The legislators and regulators of Luxembourg have always been favorable towards FinTech and RegTech, even dematerializing securities before enabling blockchain-based registrars.

🇲🇾 Malaysia

Passed Legislation: In January 2019, the Securities Commission Malaysia (SC) issued an order that sets out the characteristics of “digital currency” and “digital tokens” that are prescribed as being securities for the purposes of Malaysia’s securities law.

STO Framework: Following the order, the SC released a consultation paper in March 2019 that outlines the rules for conducting “Digital Token Offerings.” The framework ultimately comes with a lot of compliance requirements, including limits to how much can be raised and quarterly reporting requirements.

Blockchain Views: Ultimately, the concept of the ICO has been completely regulated into security tokens and has been strictly enforced. The underlying technology presents an innovation that the SC wants to allow in its borders but will not stand for anything outside of its control.

🇲🇨 Monaco

Passed Legislation: Monaco adopted legislation for security tokens and ICOs in June 2020 and also partnered with tokenization platform Tokeny to power all offerings in the country.

STO Framework: The model enables Monaco-based issuers to use security token offerings akin to traditional securities offerings. This means qualified investors only but the possibility for a global audience to reach Monaco-based assets.

Blockchain Views: The new framework also offered a model for ICOs for Monaco-based entities. According to the document, “ICOs may be private or public, under the conditions laid down by sovereign ordinance.” The document doesn’t specify between a blockchain or distributed ledger technology, only referring to it as a technology that supports a shared registry.

🇳🇬 Nigeria

Passed Legislation: In September 2020, the Nigerian SEC came out with a statement regarding all crypto and virtual assets would be considered security tokens.

STO Framework: All Digital Assets Token Offering (DATOs), Initial Coin Offerings (ICOs), Security Token ICOs and other Blockchain-based offers of digital assets within Nigeria or by Nigerian issuers or sponsors or foreign issuers targeting Nigerian investors, will be subject to the regulation of the Commission.

Blockchain Views: Token issuers will have the opportunity to prove to the Nigerian SEC that they do not fall under securities laws after registering.

🇵🇭 Philippines

Passed Legislation: The PSEC initially issued a set of draft rules for regulating ICOs for public review in August 2018. Then the Philippines introduced a new set of rules governing Digital Asset Token Offerings in February 2019, which defined utility and security tokens.

STO Framework: The Philippines uses its existing securities test to define security tokens. All security tokens must follow the existing securities framework and requirements.

Blockchain Views: Regulators were set to release new ICO guidelines for utility tokens but nothing has been passed, leaving only a path for security token offerings in the country.

🇷🇺 Russia

Passed Legislation: In July 2020, Russia signed into law a bill called ‘On Digital Financial Assets’ that allows companies can issue digital securities on a blockchain if they are properly registered with the Bank of Russia as issuers and satisfy certain criteria.

STO Framework: Digital financial assets, or DFAs, represent digital rights, including monetary claims, the possibility of exercising rights under issuable securities, the right to participate in the capital of a nonpublic joint-stock company, and the right to demand the transfer of issuable securities. However, issuing these security tokens requires strict adherence to securities laws that is not for the light-budgeted.

Blockchain Views: Russia is not particularly keen on crypto or ICOs having enacted bans in the past and the Central Bank of Russia being vocally anti-bitcoin. It is expected that new regulations regarding crypto will be enacted later this year as the bill was split into parts between security tokens and other crypto asset types.

🇸🇬 Singapore

Passed Legislation: The Monetary Authority of Singapore (MAS) has set up a sandbox with companies to operate security token exchanges and platforms. After working with the market participants, the MAS released a guidance paper for Digital Token Offerings in May 2020.

STO Framework: The guidance paper defines security tokens as traditional securities based on Singapore law, and therefore must follow all similar regulations and requirements to comply. The guidance paper also clarifies the various operator types in the market, such as exchanges and financial advisors, and reinforces the need for the approval by the MAS and the pre-requisite licensing that’s needed to perform such activities. Using multiple example scenarios, the MAS broadly covers all aspects of issuing a security token ensuring explicit clarity for the industry.

Blockchain Views: The MAS has also made cryptocurrency exchange operators, as well as ICO advisors, be required to get licensed, creating room for ICOs to operate in Singapore if they aren’t considered securities but strict regulation around the market infrastructure to attempt to curb bad actors. The MAS does not differentiate between public or private blockchains and distributed ledger technology for the purposes of security tokens.

🇨🇭 Switzerland

Passed Legislation: In 2018, FINMA released guidelines for ICOs which outlined and confines Security Tokens to the same treatment as their traditional counterpart. In September 2020, Swiss legislators passed a law that also allowed for blockchain-based registry support for securities.

STO Framework: Security Token issuers must follow the same financial framework that currently exists in Switzerland. This includes any financial service providers needing to get licensed to conduct their activities. Meanwhile, issuers can use a blockchain-based registry technology to support tracking their ownership.

Blockchain Views: ICOs have the ability to establish themselves with a utility purpose but if FINMA determines it has a partial or majority economic interest from holders that it will treat the token as a security.

🇹🇼 Taiwan

Passed Legislation: In 2018, the Money Laundering Control Act and the Terrorism Financing Prevention Act were passed to tighten the supervision of financial institutions and cryptocurrency exchanges. In May 2020, The Financial Supervisory Commission (FSC) of Taiwan released STO regulations.

STO Framework: The STO framework followed the same approach as the private market in the US, enabling private companies to access capital from professional investors only. The result has had many critiques on the STO model in Taiwan for not including retail investors. Still, Taiwan has ushered in a new form of private capital via security tokens that didn’t previously exist to issuers in the country.

Blockchain Views: The country is considered more crypto-friendly than most countries in Asia and doesn’t discriminate against distributed ledger technology or public blockchains but considers most ICOs of tokens as STOs.

🇹🇭 Thailand

Passed Legislation: In February 2018, the Thai Central Bank banned financial institutions from cryptocurrency transactions and two months later the country imposed strict cryptocurrency legislation which included jail time and hefty fines for unregistered token brokers. In September 2019, Thailand’s Securities and Exchange Commission amended its Securities and Exchange Act of 2019 to allow market players to trade digital securities in primary markets.

STO Framework: Security tokens in Thailand are limited to institutional issuers and investors but thanks to September’s changes have now ushered in security token exchanges, enabling end-to-end digital securities management on the blockchain. The Stock Exchange of Thailand also plans to support tokenized securities sometime in the future, having already been approved for a license.

Blockchain Views: Thailand’s approach to blockchain has been pro-innovation, including on ICOs. In March 2019, the country approved a regulatory ICO portal for all token issuers.

🇬🇧 UK

Passed Legislation: In January 2019, The FCA regulators in the UK released a consultation paper on token offerings that defines security tokens and other crypto assets.

STO Framework: The FCA distinguishes between three types of tokens; exchange, utility, and security. Security tokens are seen as investment instruments as outlined by the Regulated Activities Order (RAO) and also defined by MiFID.

Blockchain Views: The FCA is promoting blockchain and DLT innovation within the region, but limiting what capacity utility tokens can take form by truly needing to differentiate from an investment instrument. The FCA approved the first security token exchange in August 2020.

In The Works

🇨🇳 China

China, specifically Beijing, has actually made STOs by private issuers illegal. However, the country has numerous blockchain projects in the works, including active trials of the tokenization of government bonds and more! It seems the approach is to have complete control over all security token activity in the country, and it is anticipated the People’s Bank of China may roll out private issuer solutions in the future.

🇩🇪 Germany

German legislators introduced a draft bill ‘electronic securities’ in August 2020 to allow for the creation of bearer bonds without handheld signatures, enabling securities to go digital, which includes using the blockchain. The bill modernizes the ‘Investment Asset Act’ in Germany that restricted most types of security tokens in the country due to the wet-signature requirement. The lawmakers hope the bill is passed and enacted within the year.

🇬🇮 Gibraltar

Passed Legislation: The Gibraltar government hasn’t actually passed any specific laws but the nation’s Minister of Digital and Financial Services, Albert Isola, stated in May 2020 that security tokens are legal and welcome in the country. Security tokens are required to follow the same regulations and laws as traditional securities in Gibraltar. All crypto assets and tokens will be seen as security tokens unless otherwise demonstrated to the regulators that it is a utility token.

🇦🇪 The United Arab Emirates (UAE)

The UAE SCA has been exploring crypto and security token legislation when it launched a crypto asset consultation paper in October 2019. They have even set up a sto-regs@sca.ae email address for feedback and questions. It is anticipated that the SCA will be releasing final legislation on crypto assets and security tokens in 2020. Security tokens are required to follow the same regulations and laws as traditional securities in Gibraltar.

🇺🇸 The United States of America (USA)

The USA has not successfully passed any legislation that defines security tokens or any other crypto-asset regulation. The country's various regulations have simply policed their respective jurisdictions within the current confines of the law. However, numerous attempts at bills regarding security tokens and cryptocurrencies have been introduced to Congress but have not passed. This includes The Managed Stablecoins are Securities Act of 2019 HR 5197, the 116th Congress (2019–2020): Token Taxonomy Act of 2019, and over 30 other related bills so far. As the industry continues to grow, it is expected that clarity for defining security tokens and crypto-assets will come from legislators or regulators, especially given the crypto-friendly SEC Commissioner Hester Pierce, who was confirmed for another 5-year term in 2020 and has previously spoken publicly about wanting to introduce a crypto safe harbor framework for conducting ICOs.

Countries Where Security Tokens Are Legal But Not Defined by Legislators/ Regulators

The following is a list of countries that support security tokens under the existing securities frameworks, but do not have legislation or regulations specifically defining security tokens. Some countries, such as the United States of America, have burgeoning security token industries despite not having given great legal clarity for security tokens and blockchain-based securities issuances. This list may not be exhaustive:

*EU Restrictions
**ICO Regulations Enacted

• Anguilla
• Austria*
• Bahamas
• Barbados
• Belgium*
• Canada
• Cayman Islands
• Croatia
• Denmark*
• Finland*
• Hungary
• Italy
• India**
• Indonesia**
• Ireland
• Israel
• Kenya
• Malta**
• Mexico
• Norway*
• Netherlands*
• Luxembourg*
• Poland*
• Saudi Arabia
• South Korea**
• Spain*
• Sweden*
• United States of America
• Uzbekistan
• Vietnam

Defining Security Tokens — List of All Countries with Legal Definitions of Digital Securities &… was originally published in Security Token Group on Medium, where people are continuing the conversation by highlighting and responding to this story.

The year of the security token finishes its first half with the ‘Corona Quarter’ coming to a close — let’s review the impact and industry financings.

It’s officially a new quarter and we’ve got the latest round-up of investments into Security Token Infrastructure from the previous quarter below.

The punchline: Roughly $6,000,000+ was invested in Q2, with increased M&A activity with undisclosed acquisition terms. The result of the Coronavirus epidemic on the industry is clear, financings have slowed to nearly a full stop, while some companies have already begun taking advantage of the situation.

The largest financing of the quarter was a transaction that was supposed to originally occur over a year ago at 80x the size. Tzero’s now $5,000,000 investment from Golden Sand Capital (Originally GSR Capital) was restated and officially finalized in April. Meanwhile, the exchange itself sees record volume and growth since its listing of the digital overstock preferred share. In the same month, MERJ concluded its 4-month global STO, which became one of the first tokenized IPOs in the world.

Other than that, no other investments were made into issuance platforms or other infrastructure companies. Many industry companies launched new products and partnerships, with one, in particular, becoming very active. Republic, the crowdfunding portal sister company of Angel List, acquired two different sub-set vertical crowdfunding companies to expand into; video game development and fractional real estate with Fig and Compound, respectively. None of these offerings are tokenized, but given that the firm has a security token advisory arm and is launching its very own STO to raise capital, one would expect more STOs to come from the platform.

As the appetite for investment slows down due to Corona creating a demand for liquidity and cash hoarding, the industry has felt it in Q2. This hasn’t stopped the industry from continuing to deploy the previous $850,000,000+ that has already been raised. STO financings, exchange listings, and more marketplaces going live all point towards a booming industry to come. The question remains whether the economic conditions will push the year of the Security Token into 2021 or if it becomes the next big thing in the second half of 2020. Our prediction is that Q3 will have a slight increase in financing activity but nowhere near to 2019 averages. Instead, we anticipate even more M&A activity than the last 3 months.

As always, we will continue to update this list as we find new information. Our last update was on July 6th, 2020.

Read the Q1–2020 Market Report Here

Read the 2019 Quarterly Reports Here

Issuance Platforms

No issuance companies that raised money this quarter have been identified at this time.

Exchanges

Tzero, New York — $5,000,000 investment by Golden Sand Capital (Previous financing via $128,000,000 STO (TZROP))

MERJ, Seychelles — $1,000,000+ STO

Other Infrastructure Companies

No infrastructure companies that raised money this quarter have been identified at this time.

DeFi, Crowdfunding or FinTech Companies Also Offering STO Services**

LayerX, San Francisco — $27,500,000+ investment by JAFCO, ANRI, and Yahoo Group

Abra, Mountain View — $5,000,000 investment by Stellar Development Foundation

BlockFi, San Francisco — Undisclosed investment by Three Arrow Capital (Previous financing of $108,700,000+ by Morgan Creek, Valar Ventures, Galaxy Digital, and ConsenSys)

Mergers and Acquisitions

1exchange, Singapore — Undisclosed majority stake sale to AMTD Group

UK Fintech Worldwide, London — Undisclosed sale to Molinari Media

Fig, San Francisco — Undisclosed sale to Republic (Previously raised $7,800,000)

Compound, New York — Undisclosed sale to Republic (Previously raised $2,000,000)

Currently fundraising category (notable mentions):

Celcius, San Francisco — Seeking $15,000,000 (Previous ICO of $50,000,000)

Republic, San Francisco — Seeking $8,000,000 via a Revenue Sharing STO (Previous financing of $12,000,000 from Binance and NEO)

We will continue to update this list with missing information about Q2. Stay tuned and subscribe to see the Q3 report in October!

*Also does issuance.
**Not applied towards the total investment into Security Token Infrastructure due to some of the capital being invested towards non-security token infrastructure.

The State of Investment into Security Token Infrastructure — Q2 2020 was originally published in Security Token Group on Medium, where people are continuing the conversation by highlighting and responding to this story.

Whether it was the perceived threat of Libra, the growing demand for digital money, or forced digital transformation as a result of Covid-19, Central Banks all around the world have begun initiatives to explore the use and risks of using stablecoins and digital currencies pegged to the central reserve via the country’s native currency. Some look towards distributed ledger and blockchain technology while others shy away. Check out the below list to see which banks are up to what when it comes to launching a CBDC!

Currently, we have identified at least 45+ central banks around the world publicly researching payments technology and its applications, with the potential result being the launch of a CBDC that used distributed ledger, blockchain, or existing fintech solutions. A 2020 survey among 66 central banks by the BIS found that a large number of central banks around the world are actively developing retail CBDCs, with a third stating that issuing a retail CBDC was a medium-term possibility. However, the report did not reveal what each central bank’s responses were, making it unclear who was actively exploring a CBDC. So we decided to research all 66 participants (and others) to try and identify public CBDC programs and will continue to look for new announcements and updates as they are revealed and add them to this list.

The following list is in alphabetical order by continent and country. This list was last updated on June 15th, 2020.

Africa

🇪🇬 Egypt

Started Research: Began exploring the value of a CBDC in December 2018.

Initial Stance: The central bank of Egypt (CBE) says that a CBDC can help keep issuance and transaction costs to a minimum compared to banknotes.

Stage of Research: The central bank is conducting the feasibility studies in cooperation with a number of international financial institutions without disclosing names or specifying whether the anticipated currency would be traded for banks only or between banks and clients

Blockchain Views: Unclear at this time.

Targets: The CBE has not announced any target launch dates for a pilot program or updates since the 2018 announcement.

🇬🇭 Ghana

Started Research: The Central Bank of Ghana (BoG) created a payment systems department in 2016. They first revealed their intention to explore a CBDC in November of 2019.

Initial Stance: The BoG recognized the benefits of wider financial inclusion in the country given the large percentage of the population that is unbanked. As a result, the BoG has been exploring and implementing fintech payment solutions across the board and is setting up a fintech sandbox for private companies to participate in.

Stage of Research: The BoG’s deputy governor, Dr. Maxwell Opoku-Afari, restated in June 2020 that they are actively exploring a CBDC solution. No further information about the progress or results is available at this time.

Blockchain Views: The BoG is exploring the full spectrum of options and no clear preference for distributed ledger or blockchain technology has been declared.

Targets: There have not been any public target dates set by the BoG at this time.

🇲🇺 Mauritius

Started Research: The Central Bank of Mauritius (BoM) first began exploring a CBDC in November of 2019.

Initial Stance: “We are determined to make our country a leader in the region, where a well-regulated central bank-issued digital currency becomes a reality.” — BoM governor Yandraduth Googoolye in 2019. No further details were shared other than the CBDC will be designed for both retail and wholesale use.

Stage of Research: An announcement regarding a formal pilot project is expected sometime in 2020 after the current central bank’s governor Harvesh Seegolam confirmed the project and upcoming announcement.

Blockchain Views: Since no formal CBDC project has been announced, it is unclear what the views of BoM are on distributed ledgers and blockchain technology other than a clear expectation that they would be evaluating them in their upcoming pilot.

Targets: The BoM is expected to announce a formal pilot program for the CBDC in the coming months.

🇷🇼 Rwanda

Started Research: The National Bank of Rwanda (NBR), Rwanda’s central bank, announced that it was interested in CBDCs in August of 2019.

Initial Stance: The NBR is looking to learn more from other central banks before it develops and rolls out a CBDC in their own region, specifically citing Canada, the Netherlands, and Singapore as countries to follow. “There are still concerns about how exactly you convert the entire currency into digital form, how to distribute that and how fast can you process those transactions. Challenges come in, if technology is down how do you deal with such issues? We will join in once we are ready.” —Peace Masozera Uwase, Financial Stability Director-General.

Stage of Research: The NBR has not announced any official CBDC research programs but is actively exploring it internally. John Rwangombwa, the NBR’s governor said in 2020 “Currently, there is nothing in the pipeline and no commitment to issue a digital currency.”

Blockchain Views: The NBR has not made clear if they will be using distributed ledgers or blockchain technologies in the CBDC and it is likely that they would follow in the footsteps of the CBDC programs they are watching.

Targets: There have not been any public target dates set by the NBR at this time.

🇸🇳 Senegal

Started Research: The Banque Centrale des États de l’Afrique de l’Oues (BCEAO) or Central Bank of West African States first officially began research for the use of digital currency in 2016 but was exploring the concept even years earlier.

Initial Stance: The BCEAO was researching into CBDCs specifically to be able to promote financial inclusion, greater transparency with controls for the currency, and the digitization of the financial system in West Africa.

Stage of Research: The eCFA pilot is produced with technology created by eCurrency Mint Limited, a company that enables central banks to create their own digital fiat currency, designed to be circulated alongside paper money as legal tender and will be distributed via a local bank, Banque Régionale de Marchés (BRM). The pilot was successful and the eCFA remains to be live and functioning. Results of the pilot have not been published by the BCEAO. The BCEAO represents other nations beyond Senegal. If the eCFA is rolled out successfully in Senegal than the CBDC is expected to expand into most of Francophone West Africa Cote d’Ivoire, Benin, Burkina Faso, Mali, Niger, Togo and Lusophone Guinea Bissau.

Blockchain Views: The eCFA technology platform does not use distributed ledger or blockchain technology and is a centralized digital currency system that uses mobile wallet and QR code solutions.

Targets: No public target dates for future pilots or rollouts have been set by the BCEAO beyond the pilot being successfully completed in 2017.

🇿🇦 South Africa

Started Research: The South Africa Reserve Bank (SARB) supposedly began exploring the use of a CBDC as early as 2016, developing a 5-year consultation on the matter. At the end of 2019, the SARB issued new crypto regulations to help curb competing currencies and solutions.

Initial Stance: The CBDC will be issued at one-to-one parity with the rand, and accepted by businesses and the South African government. The currency will enable instant person-to-person transfer of value without clearing and settlement, the tender said, and consumers must be able to own and transact in the CBDC without the need for a bank account — according to the SARB.

Stage of Research: According to a 2018 report, the SARB was trialing a distributed ledger CBDC that was able to process the typical daily volume of the South African payments system in less than two hours with full confidentiality of transactions. The 2016 study is expected to conclude in 2020 with results determining next steps.

Blockchain Views: The SARB says that there are no expectations that the future technology platform has to be based on a distributed ledger, blockchain or any other format and that the solution could be based on a combination of technologies.

Targets: The 2016 study is expected to conclude in 2020 with results determining the next steps for the development and deployment of the CBDC.

🇹🇳 Tunisia

Started Research: Tunisia’s Central Bank, Banque Centrale de Tunisie (BCT), started exploring the concept as early as 2015 with announcements in 2019 that an e-dinar was being tested as a proof of concept.

Initial Stance: In November of 2019, the BCT had to clarify that it had no official CBDC stance or pilot program with any third-party in the works for the e-dinar. The BCT said it was conducting internal tests to further evaluate the technology and benefits of a CBDC. The bank is studying the opportunities and risks inherent in these new technologies, particularly in terms of cybersecurity and financial stability.

Stage of Research: No new updates have been made regarding the e-dinar since the clarification by the BCT that they were not piloting a live CBDC program. The expectation is that they are currently further evaluating the technology and benefits internally.

Blockchain Views: The BCT has made clear that it would review all technical solutions. The company that claimed to be working with the BCT on the e-dinar (which forced the clarification statement) was a blockchain development firm.

Targets: No new public targets for an official CBDC program have been announced at this time. The BCT has confirmed that they would be launching a fintech regulatory sandbox for innovations such as this one in 2020.

Asia

🇰🇭 Cambodia

Started Research: In April 2017, The National Bank of Cambodia (NBC) partnered with Japanese blockchain firm Soramitsu to begin researching a CBDC.

Initial Stance: In 2014, the NBC had previously said bitcoin does not fall under its definition of a currency. In 2017, the bank changed its tune in an effort to modernize the financial infrastructure and remove Cambodia’s dependency on the US dollar.

Stage of Research: The first tests occurred in April of 2019, where “Project Bakong” was announced. already has the support of 11 national banks, with others expected to join soon. The system is reportedly already testing retail transactions. The platform will support Cambodian riels and USD and offer 24/7, 365 transfer capabilities, with eventual support for cross-border payments using the Bakong CBDC.

Blockchain Views: Users will be able to set up a Bakong wallet that will be automatically linked to their bank accounts, allowing easy fiat currency exchange into the new CBDC in real-time. NBC says it will store all transaction data from the platform, suggesting payments may be fully traceable. The Bakong system is built on the Hyperledger Iroha distributed ledger technology.

Targets: The Bakong platform’s launch is slated as imminent and expected sometime in 2020.

🇨🇳 China

Started Research: June 2017 and completed in 2020.

Initial Stance: At the end of 2016, the Chinese government had announced that blockchain would be part of its 5-year technology plan. Despite beginning research efforts China went into a blackout and banned cryptocurrencies and exchanges in 2018. Then suddenly in the fall of 2019, China announced 500 blockchain projects and resumed its focus on a potential Yuan-pegged stablecoin.

Stage of Research: The DCEP (Digital Currency/Electronic Payments) is the final version of China’s CBDC that will eventually roll out in the country. The platform is currently being pilot-tested in four large cities around China — Shenzhen, Suzhou, Chengdu, and Xiong’an, a satellite city of Beijing with foreign merchants like Mcdonalds and Starbucks set to accept the CBDC in their Chinese stores. The DCEP is the first CBDC to ever be issued in the eastern hemisphere.

Blockchain Views: Exploring blockchain use in a secondary layer but the PBOC has said that it is currently not scalable and that the DCEP looks like more like an evolution of digital payments solution, Alipay.

Targets: The People’s Bank of China’s DCEP platform is set to roll out across the country upon successful pilot tests throughout the remainder of 2020 and into 2021.

🇭🇰 Hong Kong

Started Research: The Hong Kong Monetary Authority (HKMA) began researching a CBDC through Project LionRock in 2017. The first phase of the research was focused on exploring the feasibility of CBDC in performing domestic inter-bank payments, inter-corporate payment in the wholesale market, and delivery versus payment (DvP) debt securities settlement.

Initial Stance: The HKMA trialed the first phase with 8 domestic banks and chose R3 as a development partner. A second phase focused on cross-border payments would be carried out with the Bank of Thailand in 2019. Despite the study, in 2018, the acting secretary for financial services and the treasury of the HKMA said that in the “context of Hong Kong, the already efficient payment infrastructure and services make CBDC a less attractive proposition. The HKMA has no plan to issue CBDC at this stage but will continue to monitor international development.”

Stage of Research: The HKMA released their report with the BoT on their results of the collaboration at the end of 2019, citing reduced costs, risk, and faster settlement times than the traditional cross-border payments system. In November of 2019, the HKMA also announced a partnership with a subsidiary of the Institute of Digital Currency at the People’s Bank of China.

Blockchain Views: The HKMA remains focused on the prospective use of a CBDC for financial institutions rather than retail clients and has been using R3’s Corda platform and security tokens in their research.

Targets: A report with the results of further CBDC studies by the HKMA was due for Q1 of 2020. It is anticipated that the HKMA will release further details this year regarding their plans for issuing a CBDC.

🇮🇩 Indonesia

Started Research: Bank Indonesia (BI), the Central Bank of Indonesia, first began exploring the idea of a CBDC for the rupiah in January of 2018.

Initial Stance: Despite Indonesia having a blanket ban on cryptocurrencies, BI first began exploring a CBDC because they recognized the potential of the underlying blockchain technology, the need to reduce dependency on physical cash, and the fact that other central banks were exploring doing the same.

Stage of Research: The proposed CBDC project in 2018 was designed to last two years, concluding sometime in 2020. According to the head of the Indonesian Blockchain Association, BI has already done several workshops with local fintech companies and that a whitepaper of the results of the program should be released within this year.

Blockchain Views: As reported by the Indonesian Blockchain Association, BI has been exploring existing fintech solutions, distributed ledgers and blockchain technology to see which technologies or combination makes the most sense. The whitepaper anticipated for this year is expected to reveal more about BI’s stance on the underlying technology.

Targets: The research project is to be finished in 2020 with the expectation that BI will reveal more information about future plans and rollouts for an e-rupiah.

🇯🇵 Japan

Started Research: The日本銀 or central Bank of Japan (BoJ) first announced interest in CBDC research in 2017 and named Mizuho Financial Group as the lead bank to develop the pilot project for the J-Coin. The J-Coin is endorsed by the BoJ but is not technically being issued by the BoJ and therefore is not a CBDC.

Initial Stance: Prime Minister Shinzo Abe told parliament that the government would work with the BoJ with the ultimate aim is to improve the yen as a means of payment and settlement.

Stage of Research: Although no public pilot programs have been initiated by the BoJ, they have shown interest in CBDC research in multiple forms, seeing them as either retail, wholesale, or a hybrid of the two. The J-Coin is one of several reported initiatives the BoJ is exploring to further evaluate and understand the benefits of a hypothetical e-yen. One of those initiatives includes participation with the European Central Bank. No publicly known pilots of an official CBDC by the BoJ are live at this time.

Blockchain Views: The BoJ is evaluating all forms of digital currency, including distributed ledger and blockchain technology. No official statements have been made regarding the efficacy or challenges and therefore it is unclear at this time if the BoJ has a preference.

Targets: The BoJ has not implemented and official research or pilot programs and has not announced any target dates at this time.

🇸🇬 Singapore

Started Research: The Monetary Authority of Singapore (MAS) first announced exploring blockchain technology in 5 stage research project called Project Ubin in November of 2016. A cross-border CBDC with the Bank of Canada and Bank of England was announced in November of 2018.

Initial Stance: The first three phases of Project Ubin explored distributed ledger technology applications for clearing and settlement to delivery on payment. The MAS has notably been working with Accenture, R3, IBM, Microsoft, and J.P. Morgan. Singapore has consistently been focused on digitizing its financial infrastructure and Project Ubin acts as an extension of that progress. “Project Jasper and Project Ubin have built on previous innovations in the payments area to demonstrate that cross-border payment and settlement can be made simpler and more efficient,” said Sopnendu Mohanty, Chief FinTech Officer, MAS.

Stage of Research: Project Ubin is in its final (fifth) phase stage of research exploring broader application and implementation of a CBDC. As part of this research, the MAS has developed a blockchain-based payments network with J.P. Morgan and Temasek to enable payments to be carried out in different currencies all on the same network.

Blockchain Views: From the beginning of Project Ubin, the MAS has recognized the potential of distributed ledger and blockchain technology. The MAS has gone as far as to develop projects on R3’s Corda, IBM’s Hyperledger Fabric, and J.P. Morgan’s Quorum. It is expected that distributed ledger technology serves as the base layer for Project Ubin.

Targets: The research is expected to be completed in 2020, revealing more information about MAS’s views and future implementations (or needed research) for a CBDC in Singapore.

🇰🇷 South Korea

Started Research: Sometime in April 2020.

Initial Stance: Originally, the central bank of Korea (BoK) had a wait-and-see approach. With the recent advancement of many other nations also now exploring the technology, the bank has decided to join the race. Still, officials say they are wary of the potential benefits and will be hesitant to launch a CBDC before their research is finished.

Stage of Research: The BoK has begun a 22-month pilot study to explore the use of a CBDC as of April 2020.

Blockchain Views: Unclear at this time.

Targets: To complete the pilot research by February 2022 and reassess the need to offer a CBDC in Korea. Overall, the government has a 10-year plan to study CBDC technology and potentially integrate it into the financial system.

🇹🇭 Thailand

Started Research: The Bank of Thailand (BoT) began exploring the potential of a CBDC in August 2018 when they announced that they had selected R3 and 8 other Thai banks to trial with. The CBDC trial was named Project Inthanon.

Initial Stance: Project Inthanon is to be rolled out in phases with Phase 1 being developing and testing a proof-of-concept prototype for domestic wholesale funds transfer by using wholesale CBDC. Phase 2 was focused on Delivery-versus-Payment (DvP) for interbank bond trading and repurchase transactions, and regulatory compliance and data reconciliation for third party funds transfer. And Phase 3 was focused on exploring the interoperability amongst ledgers to achieve cross-border funds transfer which includes business modality and implementation of relevant foreign exchange regulations, aiming to reduce associated costs and enhance efficiency — in partnership with the Hong Kong Monetary Authorities’ Project LionRock.

Stage of Research: The BoT has completed all three phases of Project Inthanon and has published a report with the HKMA on the findings of Phase 3. No additional phases or projects have been announced by the BoT at this time.

Blockchain Views: The three individual phases all proved to successfully quantify the value of a distributed ledger-based CBDC. The report from Phase 3 acknowledges that there were reduced costs, risk, and faster settlement times than the traditional model.

Targets: Unclear at this time, but the Phase 3 report suggested further expansion of the testing and platform.

Australia

🇦🇺 Australia

Started Research: Sometime in 2019.

Initial Stance: In a speech in June 2018, Tony Richards, the head of the payments policy department of the Reserve Bank of Australia (RBA), said “So for the time being at least, consideration of a possible new electronic form of money provided by the Reserve Bank to households is not something that we are actively pursuing. Based on our interactions with our counterparts in other countries, it is also not front of mind for most other advanced economy central banks.”

Stage of Research: In December 2019, the RBA submitted to legislators a proposal to further explore a CBDC, possibly based on blockchain technology. The RBA acknowledges that there is no appetite for a digital Australian dollar at this time, but that there could be uses for commercial banks.

Blockchain Views: Currently neutral. The RBA does not rule out cryptocurrencies but recognizes concerns with distributed ledger technology.

Targets: The Innovation lab within the RBA has not announced any target launch dates for a pilot program.

Caribbean

🇦🇮 Anguilla 🇦🇬 Antigua & Barbuda 🇧🇧 Barbados 🇩🇲 Dominica 🇬🇩 Grenada 🇲🇸 Montserrat 🇱🇨 St. Lucia 🇻🇨 St. Vincent & the Grenadines 🇰🇳 St. Kitts & Nevis

Started Research: The Eastern Caribbean Central Bank (ECCB) began researching a CBDC for the 8 islands it represents in 2017, implementing a plan to explore and launch a CBDC by 2021.

Initial Stance: “We acknowledge that FinTech will eventually transform the ECCU financial system and by extension its regulatory construct. Furthermore, we accept that the ECCB has a responsibility to influence the adoption speed and disruption extent of FinTech innovation in the ECCU.” — ECCB Strategic Plan Report from 2017.

Stage of Research: In March of 2019 the ECCB announced a partnership with Bitt, Inc. in order to develop a blockchain-based digital currency. Shortly after, in October, the ECCB announced the DXDC CBDC project.

Blockchain Views: The DXDC system uses the secure private blockchain Hyperldeger Fabric for transparency with the network operator (the ECCB) for validating all the transactions.

Targets: The ECCB is targeting a 2021 launch date for the DXDC and by 2025 to have a 50 percent reduction in the use of cash, an 80 percent reduction in the use of cheques and growth of between 40 percent and 60 percent in the use of credit cards, debit cards and electronic payment systems in the region.

🇧🇸 Bahamas

Started Research: It is unclear when the Central Bank of Bahamas’ (CBOB) research in the CBDC began, although the island nation has been moving towards a digital financial ecosystem since the Bahamian Payments System Modernization Initiative was introduced in the early 2000s.

Initial Stance: “Cash usage also imposes physical security risks on businesses and creates more exposure to fraudulent losses relative to electronic point of sales transactions. As it relates to physical safety, a widely adopted CBDC would also place users at less risk of violent crimes that target holders of cash, and potentially reduce security and insurance costs associated with keeping cash on business premises.” — CBOB Project Sand Dollar Report

Stage of Research: In December of 2019, the CBOB rolled out a pilot of the Sand Dollar in Exuma. The CBOB is still in the process of enrolling all the 1,200 persons who signed up for the pilot in Exuma, while there are a further 2,000 who have expressed interest in participating in the initiative there.

Blockchain Views: The vision is to streamline and accelerate the process of residents paying retailers with QR codes on their phones — which doesn’t require distributed ledger or blockchain technology. The Sand Dollar will be a digital currency built on existing fintech solutions in the market.

Targets: The CBOB wants to expand the Sand Dollar to the rest of the nation in the second half of 2020.

🇨🇼 🇸🇽 Curaçao & Sint Maarten

Started Research: The central bank of Curaçao & Sint Maarten (CBCS) began exploring CBDC technology in August 2018 according to an MOU with Barbados-based fintech startup, Bitt.

Initial Stance: The CBCS is looking to reduce the level of cash usage within the monetary union and facilitate more secure, more Anti-Money Laundering and Know Your Customer (AML/KYC) compliant transactions between the islands.

Stage of Research: The central bank switched development partners in March of 2020 and is now working with equensWorldline, a European payment infrastructure provider in order to design a new payment, clearing, and settlement system. It will conduct transactions in both Antillean guilder and the US dollar.

Blockchain Views: It is unclear whether distributed ledger technology will be utilized for the payments platform due to change in technology partners for the project.

Targets: The CBCS CBDC is aiming to launch in 2021.

🇲🇭 Republic of Marshall Islands

Started Research: The Republic of Marshall Islands (RMI), an island nation of more than 1000 islands, has no official central bank. In 2018, legislators announced the project for a crypto-fiat based currency that was submitted as a proposal to the International Monetary Fund (IMF).

Initial Stance: The RMI is reliant on the US dollar since its independence from the country in 1979. Since then, decreasing economic grants and a lack of alternative currency has put the country’s currency dependence on the US dollar, and issuing a second legal tender in the region would allow the region to gain currency independence. The IMF has rejected the RMI’s proposal citing concerns for keeping economic stability if the digital currency was launched.

Stage of Research: In 2019, the RMI decided to move forward with the digital currency project and recruited SFB Technologies to help design and develop it. With it came the official name, SOV, representing the sovereign banknotes of the RMI. Since then, Tangem has also been announced as a partner to issue the bank notes supporting the digital currency and several key advisors have been added to the project. The digital currency will be issued under the following architecture: There will be a max total of 24 million SOVs initially, with monetary supply increasing by 4% per year (with the figure encoded on a blockchain) and each new issue will go directly to the stakeholders: RMI citizens, and other investors

Blockchain Views: Given that the RMI has no central bank, the SOV currency will be completely blockchain-based in order to create a monetary regulating element that will be sufficient for the island nation to scale. Several blockchain firms and experts are notably part of the project. This is notably the first true stablecoin solution created and endorsed by a government.

Targets: The RMI is targeting a 2020 rollout of the SOV currency. In addition, the IMF is slated to revisit the proposal in December of 2020.

Europe

🇩🇰 Denmark

Started Research: Danmarks Nationalbank (DN), the central bank of Denmark, first started exploring issuing a CBDC for the Danish krone in December of 2016.

Initial Stance: Lars Rohde, governor of the DN says that the DN is responsible for overseeing cash production within the country. Rohde aims to outsource the production of Danish krone and hopes to replace cash with its independent financial network based on blockchain technology. The DN saw the potential benefit of fully traceable money citing that the irrefutable and unalterable serial numbers of e-krone will enable the government to track the flow of its currency efficiently through a transparent ledger.

Stage of Research: The DN finished its research into a e-krone CBDC in December 2017 and determined that a CBDC solution would not improve the current financial infrastructure of Denmark and that offering an e-krone would essentially make the DN compete with commercial banks. “The potential benefits of introducing central bank digital currency for households and businesses in Denmark would not match the considerable challenges which this introduction would present.” — DN 2017 Report

Blockchain Views: The research did not yield any information about the benefits of distributed ledgers or blockchain as improvements for the current currency system. The DN concluded that existing financial technologies and systems are sufficient for the country.

Targets: The DN has not made any changes to their plans for a CBDC and plans to launch an e-krone remain canceled at this time.

🇪🇪 Estonia

Started Research: In August of 2017, the managing director of the Estonian e-residency program, Kaspar Korjus, proposed the creation and issuance of a national virtual currency to be called Estcoins.

Initial Stance: The purpose of the Estcoin digital currency was to create a digitally native currency that could be used by the 30,000+ e-residents that have chosen to become digital citizens of Estonia. The coin would have been privately issued by the Government of Estonia, not by the European Central Bank (ECB), which Estonia would be reliant on for creating a Euro-based CBDC.

Stage of Research: The project was ultimately canceled in 2018 after the President of the ECB intervened and disavowed the idea.

Blockchain Views: The Estcoins digital currency would have been issued as an initial coin offering and would have been built entirely on the blockchain — Estcoins were going to potentially be one of the first true stablecoins to be backed by a government or central bank.

Targets: Estonia looks towards the ECB to leverage a CBDC in the future. No plans to resurrect Estcoins are known at this time.

🇪🇺 European Central Bank

Started Research: The European Central Bank (ECB) has been exploring commercial CBDCs for some time and already has a largely already digital operation. In May 2020, the ECB acknowledged that a retail CBDC has potential and that it has begun researching its potential applications.

Initial Stance: The ECB will only introduce a digital currency if they become firmly convinced that it is both necessary and proportionate to fulfill their tasks in ensuring the stability of the Euro currency.

Stage of Research: The ECB has joined the Bank of Canada, the Bank of England, the Bank of Japan, the Sveriges Riksbank and the Swiss National Bank, together with the Bank for International Settlements (BIS), to create a group to share experiences as they assess the potential cases for central bank digital currency (CBDC) in their home jurisdictions. The ECB is reportedly working closely with the central banks of France and the Netherlands for regional testing.

Blockchain Views: Yves Mersch, executive board member of the ECB, has said that a retail CBDC could be based on a digital token circulated “in a decentralized manner, without a central ledger,” though he stopped short of saying the words blockchain or distributed ledger. It is unclear what the ECB thinks of distributed ledger technology for CBDCs at this time.

Targets: No public target dates for a digital Euro backed by the ECB themselves have been announced but the central bank is expected to share an update in the second half of 2020 or early 2021.

🇫🇮 Finland

Started Research: In May of 2017, the Suomen Pankki (SP), Finland’s central bank, released a paper exploring the demand for a CBDC in Finland.

Initial Stance: The SP recognized the growing trend of CBDCs and wanted to explore the potential benefits in regards to digitization, retail inclusion, removing the need for a third-party, and improving central bank currency controls.

Stage of Research: The SP hasn’t fully endorsed CBDCs and only acknowledged their potential in its 2017 report. Since then, the SP hasn’t released any new information or programs to research or implement a CBDC. The SP’s chief advisor on the subject also acknowledged recently that outdated regulation is as much of a factor as technology when it comes to improving the financial system of Finland.

Blockchain Views: The SP hasn’t ruled out distributed ledger technology but blockchains are viewed as unscalable. “A blockchain network would not be particularly suitable because it would be slow, poorly scalable, have latency issues, and because it would be complicated to incentivise and govern how its nodes should operate. It’s just much easier and more efficient for a bank to keep its ledger behind a firewall and let nobody near it.” — Aleksi Grym, Head of Digitalisation at Bank of Finland.

Targets: The SP has not made any new announcements regarding the research or development of a CBDC in Finland.

🇫🇷 France

Started Research: After the launch of Libra, members of the Banque de France and French political leaders called for the need to explore a “wholesale CBDC” to create a “public digital currency.” In October of 2019, European-wide reform to develop and launch an eEuro was called for by the central bank.

Initial Stance: In December 2019, French central bank governor François Villeroy de Galha said he wanted France to be the first country to issue a digital currency. “The potential role of a wholesale CBDC is, in my view, worth considering, if not desirable.” — Denis Beau, a deputy governor of Banque De France.

Stage of Research: In May 2020, the Banque de France successfully completed a pilot transaction using technology that was developed in-house. The central bank programmatically paid for a 40M Euro bond (issued by Société Générale) using the eEuro CBDC. The euro token represented a cash deposit with Banque de France and was used for the digital settlement of the transaction, which in turn triggered a cash movement between the investor’s account and the issuer’s account — both of which were held with Banque Du France.

Blockchain Views: The Banque de France sees the distributed ledger technology as a critical component to successfully implementing a CBDC. The test transaction in May 2020 was completed using smart contracts and security tokens to represent the bond.

Targets: Many more planned pilot tests are expected in 2020, including bank-to-bank transactions. No deployment of a retail CBDC pilot has been announced yet.

🇮🇸 Iceland

Started Research: In October of 2018 the Seðlabanki Íslands (SI), Iceland’s Central Bank, released a report announcing the need to further explore a CBDC based on the Icelandic króna dubbed the rafkróna.

Initial Stance: The SI recognized that other Nordic countries were exploring the use of a CBDC and wanted to have an open-minded approach. The report claims the SI is interested in determining the value of physical cash, comparing existing fintech solutions, and how a CBDC would affect the various stakeholders in Iceland’s financial ecosystem.

Stage of Research: Beyond the 2018 report, the SI has not announced any new research projects or programs to study or develop the rafkróna.

Blockchain Views: The SI questions the specific benefits of distributed ledger and blockchain technology and intends to compare existing fintech solutions to quantify the values as part of its analysis for a CBDC, according to the report.

Targets: The SI has not made any new announcements regarding the CBDC or plans to continue its research at this time. Since the report, the SI has appointed a new governor and since merged with a private bank in Iceland.

🇱🇹 Lithuania

Started Research: Lithuania’s central bank, Lietuvos Bankas (LB) first announced official efforts in exploring CBDC technology a discussion paper released in December 2019 but has been exploring CBDC applications since 2018.

Initial Stance: The LB “is tackling the issue primarily from the practical perspective. First, experience gained via broadening access to the retail payment system to non-bank institutions provides valuable insights on a what if scenario in case of synthetic CBDC. Second, the application of distributed ledger technology to issue a digital numismatic coin provides technological hands on experience and know-how.” —LB 2019 CBDC discussion paper.

Stage of Research: In July of 2020, the LB is expected to mint its first CBDC tokens purely for internal use. The purpose is for the LB to better understand the intricacies of distributed ledgers and blockchain and quantify the benefits of a CBDC. It is being tested on a blockchain sandbox the LB made available called LBchain which has now completed its three-phase research stage.

Blockchain Views: The LB is interested in extracting the value of distributed ledger technology specifically, trialing projects with IBM Poland, which used Hyperledger Fabric, and Nordic IT firm Tieto, which trialed Corda. The LB has not made clear its official stance on the benefits or drawbacks.

Targets: The LBChain platform is expected to go live sometime this year with the intention of including private partners to further test CBDC use cases.

🇳🇱 Netherlands

Started Research: De Nederlandsche Bank (DNB), the Central Bank of the Netherlands, started researching CBDCs presumably sometime in 2018 or 2019 but it is unclear at this time.

Initial Stance: “A smart contract system with complex logic potentially increases the demand for CBDC and offers opportunities to reduce transaction costs… in this way it could contribute to diversity and innovation in the payment market.” — The DNB on their Report on CBDCs published in April 2020.

Stage of Research: The Netherlands is reliant on the European Central Bank (ECB) to introduce a Euro-based CBDC to be able to use in the Netherlands. Instead, the DNB has publicly volunteered to be a testing ground to test retail functionality.

Blockchain Views: The DNB views the potential of blockchain, distributed ledgers, smart contracts as technologies that could be effective in offering a better way to manage a fiat currency. When it comes to leveraging a public blockchain, the DNB is skeptical because of the sacrifices and constraints that come with them.

Targets: The ECB is likely to work with the DNB to test a pilot version of a Euro CBDC given their public endorsement of the technology. An update from the ECB is expected in the second half of 2020

🇳🇴 Norway

Started Research: Norway’s central bank, Norges Bank (NB), first announced research into CBDCs through releasing a report on the topic in May 2018.

Initial Stance: The working group at NB studying CBDC’s were focused on 1) To ensure a public and credit risk-free alternative to deposits in private banks, in addition to cash, 2) To function as an independent back-up solution for the ordinary electronic payment systems and 3) To ensure the existence of suitable legal tender as a supplement to cash, according to the report.

Stage of Research: The working group at NB released a second report in 2019 with additional conclusions regarding distributed ledger technology and token-based currency systems. In the third phase of the working group, they will conduct a more detailed assessment of the proposed solutions and what they will require in terms of technology development. Consideration will also be given to consequences for the payment system, financial stability, and monetary policy according to the report.

Blockchain Views: The NB found that a distributed ledger-based CBDC was the strongest in terms of benefits versus drawbacks in comparison to both a centralized fintech or decentralized blockchain solution.

Targets: It is anticipated that the NB working group will complete its third research phase sometime in 2020 and the NB will release its findings shortly after.

🇷🇺 Russia

Started Research: The central Bank of Russia (BoR) confirmed in June of 2019 that they were researching and exploring the potential use of a CBDC.

Initial Stance: The BoR wants to ensure that the technology is more beneficial than cumbersome, including analyzing the retail user benefits such as security and the bank level benefits, such as additional currency controls. It also wants to quantify how it is better than the current system.

Stage of Research: The BoR has established a regulatory sandbox to begin conducting CBDC research with third-parties. No official programs, partnerships, or new publications on CBDCs have been made by the BoR since the 2019 confirmation that they were exploring it.

Blockchain Views: All technical solutions will be explored with the focus being comparing distributed ledger technology to centralized fintech solutions. No public statements have been made regarding any specific technology but the Russian government and BoR have supported banning cryptocurrencies and private digital currency solutions.

Targets: There have been no official CBDC projects put in place by the BoR yet and therefore there are no public target dates set.

🇸🇪 Sweden

Started Research: The Riksbank, Sweden’s Central Bank, began exploring a CBDC solution in November of 2016 when Cecilia Skingsley published a speech questioning the benefits of an e-krona.

Initial Stance: “If the market can make use of the new technology to launch new and popular payment services, why shouldn’t the Riksbank be able to do the same?” — Cecilia Skingsley

Stage of Research: At the end of 2019, Sweden announced a trial project with Accenture and R3 targeting a one-year pilot study to test the e-krona in a retail environment.

Blockchain Views: Specifically, distributed ledger technology was first introduced in 2017 according to a report by the Riksbank. “From a purely technical point of view, we can see nothing at this point in time that would prevent an e-krona solution built around a central register. RIX, the Riksbank’s system for the transfer of funds in accounts, is, for example, built around a central register. An e-krona could in principle be constructed in a similar way.” — According to the e-krona project report by Riksbank. A 2018 follow-up report further suggested moving away from centralization and using a distributed ledger saying “Technological development continues apace. The Project cannot therefore rule out a DLT solution becoming relevant in the longer term.”

Targets: The one-year pilot project timeline is set to have the retail CBDC initial testing be completed in February 2021. The e-krona has not been approved by the government. Current research is set to be used to quantify the benefits of the digital currency and to further determine when and how to roll out the technology.

🇨🇭 Switzerland

Started Research: The Schweizerische NationalBank (SNB), Switzerland’s central bank, entered into a partnership in October of 2019 with the National Stock Exchange of Switzerland (SIX) to explore a CBDC application and had been studying CBDCs with the Bank of International Settlements for several years (and continues to do so). In December of 2019, not even 90 days later, the SNB made a public announcement that they will not issue a CBDC.

Initial Stance: The status of the CBDC project with SIX is unclear at this time. The SNB seemed to be researching the technology and its applications for some time to come to the conclusion to reject a CBDC application for the franc.

Stage of Research: “Universally accessible central bank digital currency would bring no additional benefits for Switzerland at present. Instead, it would give rise to new risks, especially with regard to financial stability.” — SNB December 2019 Statement

Blockchain Views: The statement contained no mention regarding distributed ledger or blockchain technology. However, there was a section titled “Additional benefits currently low and outweighed by risks” that only cited that their internal “…report shows that central bank digital currency cannot meet… expectations, or only partly, that the repercussions can be far-reaching depending on the design…” which could be created by underlying technical limitations.

Targets: None. “The Federal Council and the SNB will continue to monitor developments in this area closely. Rapid technological developments, changing payment needs and the experience of other countries may lead to a reassessment of the opportunities and risks of central bank digital currency for the general public in the future.” — SNB December 2019 Statement

🇺🇦 Ukraine

Started Research: The National Bank of Ukraine (NBU), Ukraine’s central bank, started researching the benefits of a CBDC or e-hryvnia in 2016.

Initial Stance: The NBU saw the e-hryvnia as a disruptive technology that could potentially significantly change the ecosystem of the Ukrainian payment market and redistribute the existing roles of market participants.

Stage of Research: A pilot for developing and deploying an e-hryvnia was launched in December 2018 and concluded in February 2019 with results being published in February 2020. The pilot tested a distributed ledger-based centralized system with an allusion to future testing of a non-centralized version of the e-hryvnia. The report acknowledged legislative changes will be required in order to implement the CBDC in its centralized form.

Blockchain Views: The NBU recognized that a decentralized version would no longer make the e-hryvnia a CBDC but a fully decentralized currency. The report concluded that “For both models, the question of choosing the optimal basic technology remains open. For a decentralized model, the main benefits of distributed registry technology (DLT) can be used more efficiently than for the centralized one.” The centralized CBDC pilot that was conducted used a private fork of the Stellar blockchain but acknowledged it would need to improve the system or use an alternative set of technologies to make the e-hryvnia scalable enough for a public rollout in Ukraine.

Targets: No public dates regarding further CBDC research programs and pilots or the deployment of the e-hryvnia within Ukraine have been released by the NBU.

🇬🇧 United Kingdom

Started Research: The Central Bank of England(BoE) released a discussion paper in March 2020 raising the question of the potential benefits of a CBDC for the UK.

Initial Stance: When the Libra Stablecoin was first announced, the BoE firmly held the position that Libra was not suitable and that it would have to adhere to stringent rules and requirements. Now, in the 2020 report, the BoE is exploring all potential facets from cross-border payments to digital payments innovation and, even, improved central bank currency controls.

Stage of Research: As part of the BoE report, the objective is to create a discussion and research program around CBDCs for the BoE. BoE analysts have begun their research and are now exploring technology partners presumably to develop and pilot test a CBDC.

Blockchain Views: The BoE is exploring all options from complete centralization to leveraging a public blockchain. They are analyzing the various technology options through four lenses; Decentralization, sharing of data, cryptography, and programmability.

Targets: Responses to the 2020 discussion paper were due by June 12. Presumably, the BoE is preparing to publish an update that will share more details about their CBDC plans in the coming months. At this time there are no official target dates set.

Middle-East

🇮🇱 Israel

Started Research: The בנק ישראל or the Bank of Israel (BoI) began researching CBDC technology in November 2017.

Initial Stance: In 2018, the BoI released a report on the findings of the CBDC research. Specifically, the report concluded that “The main purpose of issuing digital currency is to maintain the public’s access to a central bank’s liability in the event that the use of cash declines significantly, as is happening in Sweden, but that issue is not currently relevant to the Israeli economy, since there is no significant reduction in the use of cash. The issuance of digital currency can generate other benefits, including assistance with combating the unreported economy, adaptation with the advanced technological environment, and advancing the fintech sector in Israel.” The paper concluded that issuing an e-shekel in the near future would not be advised.

Stage of Research: Since the conclusion of the BoI’s research in 2018, the BoI has not publicly introduced any further CBDC research or pilot programs. It is presumed the BoI continues to evaluate the technology and monitor world CBDC developments.

Blockchain Views: The BoI 2018 report suggested that a CBDC would have challenges, specifically saying “There are expected to be quite a few material and technological difficulties and risks in the issuance of CBDC that are mainly derived from the possible effect on the financial system. In addition, such issuance is expected to have an effect on the central bank as the issuer of cash, on its management of monetary policy, and on the payment system.” This is likely in reference to either a distributed ledger or decentralized blockchain model being technically limiting.

Targets: Since there are no publicly official research programs that are active in Israel, there are no official target dates publicly available at this time.

🇸🇦 Saudia Arabia & 🇦🇪 United Arab Emirates (UAE)

Started Research: In January of 2019, the United Arab Emirates’ central bank (UAECB) and the Saudi Arabian Monetary Authority (SAMA) announced a joint venture partnership to explore a cross border CBDC between the two nations. The digital currency would be called Aber.

Initial Stance: The main goal of Aber is to create a digital currency that can be used between the two central banks of each nation and limited banks that are hand-selected by the central banks.

Stage of Research: There is no new information beyond an update in November 2019 showing confidence in the project. The nations are presumably testing and developing a pilot program.

Blockchain Views: The CBDC is said to be limited to financial settlements using distributed ledger technologies on a probational basis. No further details regarding the Aber digital currency have been revealed yet. Both nations have considerable blockchain efforts in other sectors and, therefore, it is expected that the CBDC will explore and ultimately use the technology.

Targets: At this time there are no official target dates set for the launch of Aber or for a pilot program to begin.

🇹🇷 Turkey

Started Research: Reports that Turkey was exploring a CBDC first appeared in 2018. The government of Turkey announced a CBDC project as part of its strategic roadmap or the “11th Development plan” in July 2019.

Initial Stance: Over the past few years Turkey has struggled with high inflation and has reportedly led to 1 in 5 Turkish citizens investing in cryptocurrencies. In addition, the Presidential Plan announcement included sweeping Fintech changes to the economy as part of a plan to digitize the Turkish financial system.

Stage of Research: The Türkiye Cumhuriyet Merkez Bankası (TCMB) is the central bank of Turkey and is working with the government and technology partner, R3. The goal is to develop and deploy a pilot project that tests the feasibility and benefits of the e-lira CBDC.

Blockchain Views: The government of Turkey in its report suggests that blockchain is a critical component of the e-lira and that it will be implemented as part of the e-lira roll out.

Targets: The government has announced that the pilot project should be completed by the end of 2020 and that the e-lira should be rolled out to the public in 2021.

North America

🇨🇦 Canada

Started Research: October 2019

Initial Stance: “Cryptocurrencies may become a direct threat to our ability to implement monetary policy and lender of last resort (LOLR) role. An additional payment method could make the payment system more robust. But digital currency also presents a risk to stable, low-cost funding for (banks) (deposits).” — Stephen Poloz, Governor of the Bank of Canada

Stage of Research: Initial research began in September 2018. A two-year research proposal was announced a year later. It is unclear when the research started.

Blockchain Views: The BoC has no shared any details about the underlying technology and their views on the subject are unclear at this time.

Targets: Anticipation for a full report on the research is expected in Fall 2020.

🇺🇸 United States of America (U.S.A)

Started Research: The United States Federal Reserve (Fed), which is responsible for managing the money supply of the US akin to the European Central Bank working with EU member country’s central banks, the Fed works with 12 different State federal banks in the US. The Fed first officially began exploring CBDCs in 2019. However, the federal reserve in St. Louis released a report on CBDCs earlier in February 2018.

Initial Stance: Fed chairman Jerome Powell responded to two legislators’ request for information regarding a US Dollar based CBDC. The chairman responded with the following statements: “While we are not currently developing a [CBCD], we have assessed and continue to monitor the costs and benefits of pursuing such an initiative in the US. Overall, we observe that characteristics that make the development of a [CBDC] more immediately compelling for some countries differ from those of the U.S. For example, the use of cash in some countries there has been a rapid migration by consumers away from cash, while demand for cash in the U.S. remains robust.” He concluded that “In the U.S. context, issuing a [CBDC] for general use would raise important legal, monetary policy, payments policy, financial stability, supervision, and operational questions that need to be considered carefully.”

Stage of Research: The Fed has not officially commenced and public programs regarding developing a CBDC research pilot. The Fed continues to look at other CBDCs while doing internal research. In June 2020, the Philadelphia Federal Reserve released a report on CBDCs suggesting that a “central bank cannot invest in long-term projects itself, but instead has to rely on the expert knowledge of investment banks to do so. [The Philadelphia Federal Reserve] has derived an equivalence result that shows that the set of allocations achieved with private financial intermediation will also be achieved with a CBDC, provided competition with commercial banks is allowed and depositors do not panic.” However, the paper also concluded that a CBDC came with a “sinister counterpart.” Specifically, the paper says “If the competition from commercial banks is impaired (for example, through some fiscal subsidization of central bank deposits), the central bank has to be careful in its choices to avoid creating havoc with maturity transformation.” In a press statement on the report, Philadelphia Federal Reserve President Patrick Hacker said “Frankly I don’t think we should be the first mover as a nation to do this… given the dollar’s role as the world’s reserve currency and the need to test out new technology. But he added: “It is inevitable … I think it is better for us to start getting our hands around it.” The State federal reserve says it will continue to monitor and evaluate CBDC benefits and drawbacks. In the meantime, the Fed is working on a payments system called FedNow, a centralized fintech solution offering a real-time payments network for private banks to use as an alternative to The Clearing House (TCH) in the US. The FedNow platform is supposed to launch sometime in 2023 or 2024.

Blockchain Views: In the initial 2018 report by the St. Louis Federal Reserve, the article concluded that “a central bank will not issue cryptocurrencies in the sense of a truly decentralized and permissionless asset that allows users to remain anonymous.” It is presumed that in the U.S. the underlying technology would either be a combination of centralized fintech solutions and distributed ledger technology or simply centralized completely.

Targets: The Fed does not have an official digital dollar or CBDC research program in place and therefore there are no official target dates publicly available at this time.

South America

🇦🇷 Argentina

Started Research: In 2019, a consortium called the “financial innovation roundtable”, which included the BCRA (Banco Central de la República Argentina), began designing the system. Gibraltar-based IOV Labs was chosen to provide the underlying technology for the platform.

Initial Stance: Argentina originally did not look positively towards cryptocurrencies. In 2014, digital assets such as bitcoin were labeled as a form of illegal tender, and with it came a warning of potential fraud.

Stage of Research: A proof-of-concept for the permission blockchain network has been created, based on RSK Smart Contract network, along with the major commercial banks in Argentina, including Santander and BBVA. One of the major goals of the proof-of-concept is to show that there are other use cases for blockchain such as smart contracts, other than just cryptocurrencies.

Blockchain Views: The BCRA is exploring the full potential of blockchain from DLT to smart contracts, even leveraging the RSK platform for the pilot.

Targets: the BCRA has not announced any target launch dates for the pilot program.

🇧🇷 Brazil

Started Research: In 2018, Banco Central do Brasil (BCB) created a working group to begin exploring instant payment technology.

Initial Stance: The previous president of the BCB, Ilan Goldfajn, had a negative view on cryptocurrencies, calling them “risky.” His successor, Roberto Campos Neto, was much more open-minded and recognized a need for the BCB to play a greater role, including requiring all banks and financial institutions to participate in its CBDC, PIX.

Stage of Research: In April of 2020, BCB conducted the first transaction settlement test on PIX. Banco do Brasil, Caixa Econômica Federal, BPP, Sicredi, and Bancoob all participated in the test. The platform is currently undergoing final testing with key financial stakeholders.

Blockchain Views: The BCB initially considered blockchain technology for the system but opted in the end to use ICP Brasil Digital Certificate, the Brazilian public key infrastructure that is already used in the National Payment System. PIX team members cited scalability and privacy concerns being the ultimate restriction. Some still believe there will be a bridge to a DLT-based CBDC or, at the very least, a way to create a stablecoin tied to the PIX platform.

Targets: A public launch of the PIX system is anticipated for November 10th, 2020, with financial institutions in Brazil being required to register between June and October to participate. For 2022, NFC will be employed in the PIX platform, along with programmed/scheduled future payments, as features. By 2023, the payments will be able to be attached to a document. This means that higher payments (the purchase contract of a house and so on) will be able to be conducted through the PIX system.

🇪🇨 Ecuador

Started Research: The central bank of Ecuador, Banco Central Del Ecuador (BCE) began researching a CBDC dubbed the dinero electrónico in 2014, marking it to be the first known country to roll out a CBDC to the public.

Initial Stance: Diego Martinez, a delegate of the President of the Republic to the Board of Regulation and Monetary and Financial Policy in Ecuador said of the dinero electrónico launch: “Electronic money will not only help the poor, he added, but will act as a cost-saving mechanism for the government: Ecuador spends more than $3 million every year to exchange deteriorating old notes for new dollars. There would presumably be less wear and tear on the currency if much of it was stored at the central bank while citizens relied on mobile payments.”

Stage of Research: The dinero electrónico CBDC is no longer actively operating in Ecuador. In December 2017, Ecuador’s National Assembly, at the urging of President Lenin Moreno, passed legislation to decommission the central bank electronic money system. The legislation simultaneously opened the market to mobile payment alternatives from the country’s private commercial banks and savings institutions.

Blockchain Views: The dinero electrónico CBDC was not built on a distributed ledger or blockchain technology and instead relied on centralized fintech solutions to launch in the market.

Targets: The ECB has not announced any new research or pilot programs for a new CBDC in Ecuador. Therefore, there are no public target dates available at this time.

🇺🇾 Uruguay

Started Research: The Banco Central Del Uruguay (BCU) announced an e-peso CBDC pilot program in 2017.

Initial Stance: The focus for the BCU was to explore the potential impact of a CBDC in regards to improving financial inclusion, make a more effective tax collection system, and expanding territorial reach. Additionally, the BCU wanted to see if CBDCs were more efficient and potentially cheaper and safer than the current system.

Stage of Research: The pilot project lasted one year and was completed in 2018. Since then, the government has been weighing its options and has not yet made any additional investments into further research or rolling out any programs.

Blockchain Views: The pilot program results contained no information regarding the use of blockchain or distributed ledger technology. The e-peso program was likely launched with traditional fintech solutions.

Targets: The BCU and Uruguayan government have not made any announcements regarding the implementation of the e-peso. No other target dates are public knowledge at this time.

Potential Newcomers

🇩🇪 Germany 🇮🇳 India 🇮🇹 Italy 🇰🇿 Kazakhstan 🇰🇪 Kenya 🇲🇹 Malta 🇲🇦 Morocco 🇳🇿 New Zealand 🇵🇭 Philippines

The above countries’ central banks have expressed interest in the possibility of a CBDC but have not publicly expressed any programs or initiatives towards it. The central banks are likely conducting internal research or waiting for additional results that specifically quantify benefits successfully from any of the other active CBDC programs before proceeding with their own.

Special Cases

🇻🇪 Venezuela

In December of 2017, the President of Venezuela announced the launch of Petro coin, a state-backed cryptocurrency linked to the countries oil reserves and is considered legal tender in the country. Venezuela has had extreme economic instability causing many of the population to flock to bitcoin. Many journalists around the world have cited that the Petro coin is just an effort by the government to curb other cryptocurrencies and further control the currency and economy of Venezuela. The US has officially sanctioned the Petro coin and its use and has even offered a multi-million dollar reward for information leading to the capture of the chief crypto head of Petro coin.

🇮🇷 Iran

Iran announced plans to launch a CBDC in 2018 with an official from the Iranian government saying “We are trying to prepare the grounds to use a domestic digital currency in the country. This currency would facilitate the transfer of money (to and from) anywhere in the world. Besides, it can help us at the time of sanctions.” Iran is facing sanctions from the US and is looking at blockchain and distributed ledger technology to offer an alternative and navigate financial constraints created by the US sanctions.

🌐 Libra

Libra is a stablecoin that was designed to be the universal currency. Central banks around the world saw the launch of Libra as an existential threat and as far as potentially an audacious move by Facebook to become the largest bank in the world overnight — despite Libra being a separate organization with corporate members located all around the world. Their launch caused many central banks all around the world to expedite their research around CBDCs. A universal, stablecoin currency has been cited by many critics as a threat to monetary policy, central bank controls and influence, and financial stability. As a result, the Libra coin has been shunned by leaders of central banks all around the world and is still seeking regulatory approval from Switzerland’s FINMA regulator to authorize their launch to the world with the full support of financial regulators to ensure Libra’s authenticity.

If you have seen new updates or new CBDC programs launch that are not on this list, please leave a comment below and we’ll validate the information and update our list.

If you enjoyed this list, be sure to check out more research and articles at Medium.com/Security-Token-Group. For Security Token market insights visit STOmarket.com.

List of All Central Bank Digital Currency and Stablecoin Initiatives was originally published in Security Token Group on Medium, where people are continuing the conversation by highlighting and responding to this story.