DTCC Urges Financial Institutions to Collaborate in Forming A DLT Regulatory Framework

U.S Depository Trust & Clearing Corporation (DTCC) published a white paper on Feb,12 calling for the establishment of a proper regulatory framework on blockchain technology. The leading American financial markets clearing and settlement company noted that this would help avoid the risks associated with Digital Ledger adoption in future.

This white paper dubbed ‘Security of DLT Networks’ highlights the opportunities and looming risks if financial industry stakeholders do not step up to oversee blockchain implementation. DTCC’s Chief Security Officer, Stephen Scharf, further emphasized on the importance of tech policy upgrades;

“DLT offers great potential, but as with any new technology, it also comes with certain risks. Traditional security measures may not be adequate, so it is critically important that this topic is top of mind for any DLT implementation.”

DTCC’s Proposed Strategy on Blockchain Implementation Oversight

According to the whitepaper, financial market players are better off collaborating to form standardized guidelines on DLT adoption. It continues to read that a coordinated approach would help address the security associated risks in detail. This will in turn assist firms operating and looking to enter the blockchain market to play by the book and grow within a regulated framework.

DLT will notably improve how data is protected, verified and processed. As a result, DTCC suggests that a more tech specific framework would be effective in integrating the DLT networks within IT legalities across the world. An industry consortium to form fundamental operational guidelines was also identified as a long-term solution to the existing legal gaps in the DTCC whitepaper.

There have been previous efforts to form a baseline regulatory framework around blockchain tech but only a few jurisdictions have achieved much. DTCC plans to capitalize on its muscle within the derivatives market to lobby as many financial players and develop a standard for DLT frameworks. Mr. Schaff noted on the importance of a global framework for all industry participants;

“As is common in IT security communities, frameworks must be widely available, generally agreed upon, and commonly adopted.” he added “As best practices mature, they can be adopted into a formal framework and used for financial industry participants and regulators alike.”

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Author: James W

Grayscale Investments Bitcoin Trust (GBTC) Becomes The First Registered SEC Reporting Company

Grayscale Investments’ Bitcoin (BTC) Trust is now registered as a Securities and Exchange Commission (SEC) reporting firm.

In May 2015 the trust was the 1st publicly traded BTC investment channel in the over-the-counter market. In November 2019, Grayscale filled with SEC a Form 10 that allows it to make the trust available to investors having restrictions with non-regulated channels. Its Form 10 became effective automatically, sixty days from it’s filing date.

Grayscale Bitcoin Trust is the First SEC Reporting Crypto Investment Vehicle

The shares of the trust, registered under the Exchange Act of 1934, means the GBTC is the first SEC reporting crypto investment vehicle. This means it now has to send quarterly and annually reports to the SEC, also to publish any unscheduled events or changes within the corporation and to send audited statements together with other forms required to the SEC. Under its new status, it has to reduce the accredited investors’ statutory period from 12 to 6 months. The changes will have to take place 90 days after the SEC registration approval, and only if the trust meets the Securities Act’s requirements.

The Fund Was Given Private Placement Exemption from SEC in 2013

In 2013, GBTC was given a private exemption from being registered to SEC, but Grayscale decided on its own it needs to give the fund’s compliance standard a boost for investors to trust it more. This is what the Grayscale’s managing director, Michael Sonnenshein, had to say about it:

“Grayscale voluntarily pursued this designation and will continue to work within existing regulatory frameworks. Today’s announcement should signal to investors that our regulators are willing to engage with our products and our space as a whole.”

GBTC Has Been a Success in 2019

Over the last year, GBTC has been very successful, having more than $471 private placement total inflow, which is twice more than in 2018. Sonnenshein has explained before that it doesn’t want GBTC to become an ETF, even if its products are similar in structure with ETFs and are modeled after the most popular investment ones.

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Author: Oana Ularu

Grayscale Releases November Update For Its Investment Products

The best performing product on November 29 was the Grayscale Bitcoin Trust with a day change of 4.52% followed by the Grayscale Ethereum Classic Trust with an increase of 4.18%.

Grayscale Releases November Update

According to data provided by Grayscale on November 29, all their single asset products experienced gains.

The worst performing product was the Grayscale Stellar Lumens Trust that grew just 1.95%, followed by the Grayscale Litecoin Trust with a growth of only 2.67%.

Other products include the Grayscale Bitcoin Cash Trust with an increase of 3.75%, the Grayscale Ethereum Trust, that grew 3.75%, the Grayscale Horizen Trust, expanding 3.36%, the Grayscale XRP Trust, surging 2.73% and the Grayscale Zcash Trust with an appreciation of 3.75%.

A few weeks ago we wrote that back on November 19, 2018, things were looking very bad for cryptocurrencies.

Indeed, every single product provided by Grayscale was experiencing massive losses with the exception of the XRP Investment Trust that registered an increase of 3.2%.

It is worth mentioning that these losses were related to the fact that the crypto market was experiencing a capitulation. After the Bitcoin Cash (BCH) hard fork on November 15, things turned out to be very negative for Bitcoin (BTC) and all other cryptocurrencies in the market.

Grayscale is a market leader in digital currency investing with a wide range of solutions for investors in the crypto space. The company provides investing and crypto asset management for larger and traditional investors.

The solutions provided by the firm allow many interested parties in gaining exposure to this innovative and exciting market.

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Author: Carl T

Grayscale’s Bitcoin Trust Witnesses A Drop in Price but Still Maintains at AUM 2.4 Billion

Despite experiencing a tough day of low prices, Grayscale’s Bitcoin Trust maintains at $2.23 billion AUM. According to a recent report released by the cryptocurrency investment company dated November 15, its Bitcoin product only suffered a 1.3% change despite the price dropping by over $500.

The price of the Bitcoin Trust has been trading between the range of $8,500 and $9,000 early this week. Despite the minimal volatility in the product, the market was set to witness huge movements. When the Bitcoin trading volumes dropped, investors migrated to other markets. For the first time since October 25, the price of Bitcoin went below $8,500 after falling by 2.1%.

This drop in the price of the top digital asset happened when it traded below its short-term mark of $8,600. Bitcoin has been trading above this mark since October 25 after president Xi Jinping positively commented about the blockchain tech leading to a 40% gain in less than a day.

Grayscale’s Digital Fund, which consists of a variety of digital currencies, among them being Ethereum, Litecoin, Bitcoin, XRP, and Bitcoin Cash, witnessed a 1,15% drop putting the fund’s AUM at $24.2 million.

Bitcoin was not adversely affected like the other digital currencies in terms of its daily change. The GBT only suffered a 1.13% drop when other currencies were dropping by higher percentages. Ethereum, which is the world’s second-largest digital assets by market capitalization with $88.3 million AUM, dropped by 1.7%. Litecoin fell by 2.28% while Ethereum Classic Trust and Bitcoin Cash Trust fell by 2.51% and 2.63%, respectively. XRP dropped by 2.07%.

When other trust funds were dropping, Grayscale Horizen Trust gained immensely by 14.93%, with its AUM holding at $2.2 million.

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Author: Denis Miriti

Northern Trust To Test Fractionalize Bonds On Hyperledger Sawtooth In Partnership With BondEvalue

Northern Trust, a custody bank, has begun to test the trade of fractionalized bonds using blockchain technology. The banking institution is working together with BondEvalue, a debt market firm based in Singapore.

BondEvalue is set to provide asset services for the bank, which will tokenize high-grade bonds for retail investors using the Hyperledger Sawtooth technology. Normally, this type of investment is too large for retail investors, but by tokenizing the assets, someone can buy them without having large amounts of cash.

This shows the interest the bank has in the new technology. After the institution sold its first equities using the blockchain. Northern Trust has definitely shown some interest in the area. With $124 billion of assets under its custody, the bank is currently the 24th largest one in the U.S., so its efforts to use the blockchain are very relevant to the industry.

Justin Chapman, the global head of market and innovation at the bank, has affirmed that Northern Trust has created a solution that can be used in multiple jurisdictions and that the focus of the bank right now is to improve the blockchain-based services to offer the best investments for the clients.

Initially, the service will be offered in Singapore using the local sandbox initiative. If the pilot manages to be successful, the bank will continue the project together with BondEvalue and try to take it to global markets.

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Author: James W

Grayscale’s Crypto Assets Inflows Increased By $250 Million In Q3; Showing Strong Demand

Grayscale Bitcoin Trust released its Q3 2019 report earlier on Tuesday, October 15, 2019 showing increased interest in institutional investment in the crypto industry.

The “Digital Asset Investment Report Q3 2019” states Grayscale holds a total of $2.1 billion USD in crypto assets under management. Grayscale enjoyed a boost in AUM value despite the price of Bitcoin plummeting from $12,000 USD to $8,100 USD during the period.

‘Over $75 million USD inflows in a day’

According to the report, the crypto asset management firm’s AUM has increased by $382 million USD since the start of the year.

The Grayscale Bitcoin Trust (GBTC) product contributed to over 60% of the total inflows averaging $7.1 million USD weekly. The weekly average inflows of the rest of cryptocurrencies including Ethereum, ZCash and Ethereum Classic stands at $2.7 million USD.

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Grayscale’s AUM grew to $412 million USD in the past one year as institutional investment grows. In a statement on the massive AUM growth during the third quarter, managing director, Michael Sonnenshein, said,

“I actually think that we had a day where we raised over $75 million in a single day — which was the largest inflow we ever had in a single day.”

GBTC investments boss inflows in Q3 2019

In Q3 2019, the company witnessed huge inflows of crypto assets following a highly successful #DropGold campaign, which lured U.S investors to switch from the shiny precious metal to digital gold.

According to the report, an average of $19.6 million USD entered Grayscale’s coffers, totaling $254.9 million USD in the three months. GBTC investments remained popular through the year raising $13.2 million during Q3 2019, representing 67% of the total investments during the quarter.

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Excluding the flagship GBTC product, the company’s alternative crypto assets grew by $107 million USD during the quarter. On Monday, the Financial Industry Regulatory Authority (FINRA) approved the trading of Grayscale Digital Large Cap Fund (GDLCF) on OTC markets in the U.S.

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Institutional investment is growing

Over 84% of investment in Q3 came from institutional investors including legacy finance and crypto related hedge funds. However, a large number of investors are not native to the crypto field as Sonnenshein explained,

“Most of our institutional investors are actually not crypto hedge fund. It really runs the gamut — we have tons of global macros funds who maybe look at digital assets as a way to be short fiat money or thinking about all the economic and political turmoil going on globally.”

Images sourced from Grayscale Digital Asset Investment report Q3 2019: https://grayscale.co/insights/grayscale-q3-2019-digital-asset-investment-report/

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Author: Lujan Odera

DTCC Delays Blockchain Post-Trade System To Sidestep Possible Brexit Complications

Brexit is coming up and several companies in the United Kingdom are scared of it. Now, the Depository Trust & Clearing Corporation (DTCC) has recently affirmed that it would postpone the launch of its new post-trade platform for derivatives to avoid any kind of complication with Brexit.

According to the official reports, the delay is actually happening to allow more testing on the platform. Many people know, however, that Brexit is getting close, and that now is a bad time for launches.

On the official side of the story, the company affirmed that the blockchain-based project is progressing pretty well and that the company is only making sure that its product will be 100% ready when it hits the market. Coindesk, however, cited an inside source affirming that Brexit is the actual main reason for the delay.

The initial launch date for the project would be around the time that Brexit happened (if it does, indeed, ever happen, because no one truly knows at this point). With such a drastic change, the whole regulation of the country might suddenly change, which can often be a huge headache and scare investors.

During the announcement of the delay, the company did not provide any kind of exact date for the launch, which is understandable, as it will possibly wait to see what happens after Brexit.

The platform created by the DTCC is known as TIW and it works as a mainframe to cloud solution based on the blockchain. The current version of the product handles $11 trillion of credit derivatives, so the upgrade will certainly be a big deal.

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Author: Silvia A

Ripple-Powered MoneyTap Adds Two New Banks, Now Totals 30

SBI Holdings’ MoneyTap now welcomes Daiwa Securities Group Inc. and Sumitomo Mitsui Trust Bank as its shareholders, bringing the total ally of financial institutions to 30.

Established in March, this smartphone application is powered by the blockchain technology of Ripple that allows customers of the bank consortium to settle transactions instantly, 24 hours a day, seven days a week.

Back in 2018, when the idea was first introduced, Ripple stated that MoneyTap will be the “first mobile app of its kind to be developed and used by multiple, different banks in the country.” Planned to start with just three members of the Japan bank consortium, SBI Net Sumishin Bank, Suruga Bank, and Resona Bank, this number surged 10x in a few months.

The list of partner banks include:

SBI Holdings, Keiyo Bank, Ashikaga Bank, Awa Bank, Atago Bank, Kita Nippon Bank, Kiraboshi Bank, Gunma Bank, Sanin Joint Bank, Shiga Bank, Shimane Bank, Shimizu Bank, Shinsei Bank, Sumishin SBI Net Bank, Suruga Bank , Seven Bank, Sendai Bank, Third Bank, Chiku Bank, Toho Bank, Towa Bank, Tochigi Bank, Hiroshima Bank, Fukui Bank, Fukuoka Chuo Bank, Fukushima Bank, Hokuriku Bank, Michinoku Bank, Sumitomo Mitsui Trust Bank, Daiwa Securities Group Head office, one other bank.

The Japan consortium, led by SBI Ripple Asia is comprised of 61 banks that cover over 80% of all banking assets in Japan.

The idea has been that MoneyTap will provide on-demand payments to the vast majority of the country through this consortium.

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Author: AnTy

Facebook’s Mark Zuckerberg Preaches Caution After Problems With Libra Coin Approach

After several scandals and issues eroded the public’s trust in Facebook, a company that is famous for its disruptive activities recently, its creator Mark Zuckerberg is starting to become more cautious, the Nikkei Asian Review reported.

According to his latest interview, internet companies were at the center of several big social issues. He acknowledged that Facebook was “behind” when it came to some things such as protecting the information of the clients or preventing their algorithms from interfering in elections.

These were, in fact, some of the main issues that the company had to deal with. Fake news and the scandal with Cambridge Analytica harmed the company’s reputation, something that is haunting them now that they are trying to get its new Libra stablecoin approved.

Zuckerberg affirmed that the approach of the company has changed because of this and that it is more cautious now. Before, they just built tools and dealt with the problems later. Now, however, they know that this can cause social problems by releasing something without mitigating the possible problems that it can have before the launch.

He also talked about Libra. According to him, the company has been questioned by lawmakers and entrepreneurs about the effects that Libra can have on the economy. Zuckerberg claims that he is committed to making sure that no issues will be overseen with the project.

Libra’s launch is already scheduled for 2020 and the company is said to be working hard to move forward and launch the best possible solution in a way that it is compliant with the law. He finished by affirming that the company changed its way of doing things and that Facebook now operates very differently from what it did five years ago.

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Author: Gabriel Machado

Legacy Trust Puts Together a New Crypto Asset Pension Plan Service

Legacy Trust, a crypto custody provider, has recently decided to launch a new product, a digital pension plan based on cryptocurrencies. The company, which is based in Hong Kong, announced its plans and also opened the way for its employees to participate in the program.

According to the CEO of the company, Vincent Chok, the new product is expected to appeal mainly to people who are already investing in crypto. He affirmed that the company is trying to offer something to the people who are active in the space and that can be used as a tool for them.

One of the goals is to offer it to businesses that want to drive employee loyalty up, by letting them participate in the growth of the company as well. The payments to the pension plan can be done directly from taking a cut of the salaries or by voluntary contributions. The money can then be withdrawn when the person retires or dies.

According to Legacy Trust, the plan will address most of the concerns that could surface from using blockchain technology and cryptos as an investment. However, it was still unclear by the time of this report what exactly would be measured for that.

In related news, the company has recently started a partnership with the famous crypto wallet Ledger in order to offer more security for its clients. Now, the company is set to use the Ledger Vault product to secure the assets of the clients more efficiently.

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Author: Bitcoin Exchange Guide News Team