Regulatory News
United Kingdom (UK)
Bank of England and HM Treasury respond to Digital Pound Consultation - On January 25, the Bank of England and HM Treasury responded to the consultation on a digital pound, emphasizing that no final decision has been made yet on whether to launch a central bank digital currency. The response highlights ongoing work during the design phase to explore feasibility and potential design choices, focusing on enhancing choice, convenience, and innovation in payments. The feedback from various industries was largely supportive of the proposed design, while concerns about access to cash, users' privacy, and control of money were addressed. The publication confirms that primary legislation would guarantee users' privacy and control, with no access to personal data by the Bank or the Government. The commitment to protect access to cash remains, reinforcing the UK's position in global finance.
Parliament Establishes new Committee to scrutinize UK financial regulations - In response to growing concerns over accountability as financial services regulations gain increased powers post-Brexit, the UK Parliament is launching a new Committee to scrutinize the country's financial regulators. This Committee, chaired by former Cabinet Minister Lord Michael Forsyth, will complement the work of the Treasury Select Committee, taking a thematic approach to regulators' involvement in the City to avoid duplicating efforts. Members of the House of Lords Committee include figures from various political backgrounds, such as financial services executive Lord Jonathan Kestenbaum, businessman Lord Clive Hollick, and economist Lord Eatwell. The Committee, expected to be approved by Peers later this month, aims to enhance parliamentary accountability for financial regulators' roles and activities.
FCA TechSprint 2024: Addressing financial inclusion challenges - The Financial Conduct Authority (FCA) is organizing a TechSprint focused on Financial Inclusion, aiming to address challenges related to access to financial services and the overall consumer journey. Scheduled to run from March 7 to May 30, 2024, the virtual TechSprint will conclude with a Demo Day held in person at the Technology and Innovation Centre, University of Strathclyde, Glasgow, Scotland. The initiative encourages participation from individuals and mentors, with an application deadline of February 13. The FCA's emphasis on financial inclusion aligns with its commitment to fostering solutions that enhance access to financial services. The event follows the FCA's previous research in April 2020, reflecting insights gained from earlier sprints.
Elwood granted FCA authorization as Digital Asset Service Provider - Elwood Technologies has received authorization as a service company from the UK Financial Conduct Authority, becoming a pioneer in digital asset technology to secure regulatory approval. The approval covers Elwood's execution management system for security tokens and derivatives, allowing clients seamless access to global crypto exchanges. Elwood's CEO, Chris Lawn, emphasized the company's commitment to meeting robust regulatory standards and providing institutional-grade digital asset services. The SaaS platform, inclusive of risk representation and analytics tools, has already attained SOC2 and ISO 27001 certifications. Backed by leading financial firms, including Goldman Sachs and Barclays, Elwood's FCA approval marks a pivotal moment in its growth journey for 2024.
Global News
BIS Innovation Hub unveils Six Key Projects for 2024, focusing on cybersecurity, green finance and CBDCs - On January 23, the Bank for International Settlements (BIS) Innovation Hub has revealed its 2024 work program, introducing six projects that emphasize cybersecurity, combating financial crime, central bank digital currencies (CBDCs), and green finance. Among the initiatives, Project Leap, from the Eurosystem Centre, enters its second phase, aiming to "quantum-proof" payment systems against potential threats from quantum computers. Project Symbiosis, from the Hong Kong Centre, explores the use of AI and big data for enhanced supply chain disclosure. Project Aurum, also from Hong Kong, studies privacy in retail CBDCs. Other projects include NGFS Data Directory 2.0, Promissa (tokenizing promissory notes), and Hertha (using network analytics to combat financial crime). The BIS Innovation Hub aims to collaborate with central banks and partners to navigate the impact of emerging technologies on the financial system.
Industry News
European Union (EU)
BlockInvest, backed by Crédit Agricole Italia, tokenizes distressed credit markets in Italy with Polygon's PoS Technology - Milan-based BlockInvest, supported by Crédit Agricole Italia, is leveraging Polygon's PoS technology to tokenize distressed credit markets in Italy, addressing issues of information asymmetry and liquidity. With the goal of transforming non-performing loans (NPEs) into a transparent and efficient market, BlockInvest's initiatives involve a Proof of Concept for on-chain digital note issuance in collaboration with 130 Servicing. The company is also tokenizing distressed credits secured by real estate mortgages acquired by Davis & Morgan S.p.a., a regulated Italian financial institution. Choosing Polygon for its scalability, speed, and security, BlockInvest aims to set new standards in asset tokenization, providing fractional ownership and enhancing liquidity in the distressed credit markets.
Deka Investment issues tokenized fund shares on SWIAT Blockchain - Germany's prominent fund provider, Deka Investment, has issued tokenized fund shares on SWIAT's decentralized financial market infrastructure (dFMI). Utilizing SWIAT's platform, Deka Investment issued tokenized shares for its A-Deka-BlockchainEINS fund, exploring potential cost savings and efficiency gains through reduced intermediaries. The tokenized shares, often referred to as 'crypto' fund shares in compliance with German regulations, are not cryptocurrencies but represent a digitalized form of securities. Acting as the depository and custodian for the offering, DekaBank oversees the issuance. SWIAT aims to attract more institutions to its network for real-time settlement and collateral management, aligning with its strategic goal of establishing an international settlement standard for digital assets across various asset classes in collaboration with global financial institutions.
LATAM
Nubank leads LATAM Fintech growth with Innovative Digital Banking - Brazilian neobank Nubank has emerged as a leading fintech in Latin America, experiencing significant milestones, including a $45 billion IPO and surpassing 90 million users. In Q3 2023, Nubank reported a 53% YoY revenue growth, reaching $2.1 billion, and highlighted achievements such as the Nu Account launch in Colombia and WhatsApp payments in Mexico. The neobank's emphasis on digital banking and financial inclusion positions it as a pioneer in the industry. With expanding services, strategic partnerships, and positive financial metrics, Nubank aims to maintain its momentum and transform the Latin American financial services landscape.
FitBank and goBlockchain partner to tokenize financial assets in Brazil - Fintech companies FitBank and goBlockchain have announced a partnership aimed at tokenizing financial assets and structured projects in Brazil. The collaboration aims to streamline business processes for companies already involved or looking to engage in solutions that require cryptographic technology. Herbert Moller, FitBank's Chief Revenue Officer, expressed that the partnership with goBlockchain, a technology company serving third parties, will simplify business operations for entities dealing with cryptographic solutions. FitBank, known for its banking-as-a-service (BaaS) solutions, processed over 210 million transactions impacting 80 million end-users in 2023. The partnership seeks to accelerate the delivery of crypto technology solutions to clients, offering comprehensive blockchain solutions with the strength and reputation of FitBank.
MENA
DIFC Innovation Hub, Julius Baer, and Euroclear collaborate to shape the future of digital asset inheritance - DIFC Innovation Hub, Julius Baer and Euroclear have partnered in Dubai to address challenges in digital asset inheritance, aiming to explore how technology can assist in managing expanding portfolios of tokenized assets. With an estimated AED 3.67 trillion (USD 1 trillion) in assets set to transfer in the Middle East over the next decade, effective estate planning becomes crucial. The three-month collaborative project will result in a whitepaper offering a future-oriented solution for multi-generational inheritance through tokenization. This initiative seeks to transform wealth management, responding to complexities arising from the rapid adoption of various digital asset classes.
Global News
Sygnum raises over $40 million led by Azimut - Sygnum has successfully raised over $40 million in an interim close of its Strategic Growth Round, surpassing its initial $35 million target. The global digital asset banking group's post-money valuation now stands at $900 million. The oversubscribed round, led by Azimut Holding, will fuel Sygnum's expansion into new markets and enhance its suite of regulated products and services. Despite challenges during the "crypto winter," Sygnum achieved a $100 million+ annualized revenue run rate and positive cash flow in Q4 2023. The funds will be used to broaden Sygnum's geographic reach and develop fully regulated products, including its B2B platform.
Solana introduces token extensions, enabling regulated innovation and versatility - Solana, a leading blockchain network, has unveiled token extensions in collaboration with regulated institutions. These extensions offer a standard interface connecting to Solana applications, streamlining the creation of specialized tools and functionalities at the token level. Notably, stablecoin issuers such as Paxos have already leveraged these extensions to enhance their offerings on the Solana network, showcasing its growing prominence in the blockchain space.
Deutsche Bank-backed Taurus expands tokenized securities exchange TDX to retail investors - Swiss-based Taurus, a blockchain and tokenization services provider backed by Deutsche Bank, has opened its FINMA-regulated exchange, TDX, to retail investors. Taurus, known for offering digital asset custody technology to major banks like Credit Suisse and Pictet, previously limited TDX access to professional investors. The move comes after Taurus raised $65 million in a Series B funding round last year, with support from Credit Suisse, Deutsche Bank, Pictet, Arab Bank Switzerland, and Investis. The expansion to retail investors aims to enhance liquidity for both retail and professional investors, allowing those who invested in tokenized securities' primary issuances to trade them on TDX.
