Digital Assets in Focus: Issue 1

Six Digital Exchange (SDX), a regulated digital asset exchange and Central Securities Depository (CSD) built using DLT has completed a pilot project with Pictet, a Swiss multinational private bank. The pilot demonstrated the potential of tokenisation and fractionalisation in transforming fund management. 

The project involved the tokenisation of corporate bonds, enabling fractional quantities to be allocated to individual portfolios, managed by Pictet Asset Management. This innovative approach demonstrated how tokenising bonds allows for greater customisation and personalisation of client portfolios, as well as increased diversification through the ability to fractionalise an asset. Olivier Ginguené, Chief Investment Officer for Asset Allocation and Quantitative Investments at Pictet Asset Management, highlighted the significance of this project, stating that it offers "customisation at scale." 

Australia to Commence Trials of Tokenised Asset Settlement and CBDC

Fourteen participants have been selected to undertake trials of tokenised asset settlement in financial markets as part of Project Acacia, a joint initiative between the Reserve Bank of Australia (RBA) and the Digital Finance Cooperative Research Centre (DFCRC).  

Twenty-four innovative use cases, and a diverse range of organisations, ranging from local fintechs to major banks, have been conditionally selected for this next stage of the project. This will include nineteen pilot use cases involving real money and real asset transactions, and five proofs of concept involving simulated transactions.

The use cases involve a range of asset classes, including fixed income, private markets, and carbon credits, and examples of the proposed settlement assets include stablecoins and central bank digital currency (CBDC).

This initiative aims to explore the potential of tokenisation and CBDC in improving the efficiency and speed of cross-border payments. It will be tested against a range of different DLT environments, including private and public-permissioned platforms, such as Hedera, R3’s Corda, and other EVM-compatible networks.

European Watchdog Warns of Inadequate Malta Crypto Licensing 

The European Securities and Markets Authority (ESMA) has raised concerns over Malta's handling of licensing approvals under the EU's Markets in Crypto-Assets regulation (MiCAR). A recent report highlighted deficiencies in Malta’s Financial Services Authority's (MFSA) authorisation process, citing an inadequate risk assessment framework with outstanding material issues.

ESMA has urged tighter oversight by the MFSA, to ensure compliance with MiCA’s standards. Furthermore, the warning highlights the need for regulatory bodies to work together to ensure consistent and effective implementation of regulations across the EU.  

BNY Mellon Selected for Ripple USD Reserve Custody

Ripple, a leading provider of digital asset infrastructure for financial institutions, has announced that The Bank of New York Mellon Corporation (BNY Mellon) will serve as the primary custodian of its reserves for its Ripple USD (RLUSD) stablecoin. This coin is designed for enterprise-grade financial use cases.

Stablecoin reserves, which are pools of assets, such as U.S. dollars, cash equivalents, and short-term treasuries fully back the value of a stablecoin like RLUSD, ensuring each token issued maintains a 1:1 peg with the underlying fiat currency.

BNY Mellon will leverage its expertise and technology stack to provide custody services for RLUSD. The partnership is expected to provide a secure and reliable way for financial institutions to hold and manage digital assets, which is critical for the widespread adoption of digital assets. Additionally, the partnership demonstrates the growing recognition of the importance of digital assets in the financial sector and the need for secure and reliable infrastructure and custody to safeguard their investment and use.