🤝 Security Token Prime Insights: 4/15/2024

Exclusive Intelligence for Security Token Prime Members

April 15, 2024

Summary and Key Takeaways

1.BUIDL and USDC: BlackRock integrates with Circle’s Stablecoin

After amassing $293 million in assets over just 3.5 weeks, BlackRock’s liquidity fund BUIDL began enabling functionality to better connect with the crypto ecosystem. This past week it was announced that  BUIDL would be exchangeable directly with Circle for USDC stablecoin. Since BUIDL is pegged to a $1 net asset value, the exchange rate is constant between the liquidity fund and the stablecoin. What the stablecoin will enable investors to do is actually make use of the broader DeFi ecosystem or global payments that BUIDL doesn’t currently support, since it is indeed open solely to qualified investors whitelisted on Securitize’s platform. It’s noted that swaps between BUIDL and USDC will be near instantaneous, thus enabling an on- and off-ramp in real-time. This creates a powerful rotation mechanism for investment managers looking to more precisely build their portfolios and strategies between a professionally-managed yield fund and a pure payments tool.

2. Tether, the World’s Largest Stablecoin, Announces Tokenization Platform

As the real-world assets craze continues throughout 2024 (and, we believe, will continue indefinitely), legacy players in the digital asset space are adding their services. Recently, Tether’s own CEO (and CTO of Bitfinex) announced the soon-to-come RWA tokenization platform on Tether rails. That’s a monumental $107 billion in existing capital through the USDt stablecoin, and one that’s already integrated with Bitfinex Securities and a number of non-United States platforms. “Fully non custodial. Multi chain. Multi asset type.” It sounds like a DeFi dream, and one that shouldn’t be taken lightly given the existing traction of the Tether brand.

3. Clearstream Joins ECB CBDC Trials

The German securities exchange Deutsche Borse’s central depository system, Clearstream, has announced they will be supporting the European Central Bank’s trials for a central bank digital currency and tokenization efforts. Clearstream’s head of issuer services stated that they are proud to expand their D7 DLT powered platform by connecting into “the main digital payment solutions across the Eurosystem.” It’s a big deal indeed as the CSD aims to create a new technical infrastructure for digital capital markets and potentially being the first provider of the ECBs tokenized euro will be a powerful settlement tool for their ecosystem and, surely, attract traditional markets in Europe to start leveraging the financial rails of tomorrow. Clearstream is already working with SIX Swiss, Banque de France, and numerous others on its post-trade and tokenization services, which are now seeing fortification through the ECB.

4. El Salvador, Bitfinex, Tokenized Bonds… and Hilton?

This interesting combination marks the first foray for Bitfinex outside of Kazakhstan. The 5-year construction bond offers perks associated with the Hampton by Hilton (Franchise operated, not officially endorsed by Hilton) which will be built by the international airport of El Salvador. Perks like discounts and free night stays, the benefits model to harmonize hotels and resorts with tokenization continues to take hold. This combined with Tether’s plans to introduce more tokens bodes well for the industry’s growth.

Notable Market Headlines

Institutional Activity

STM Data

This week the Security Token Market data team would like to highlight the increase in volume for both US and non-US marketplaces. This follows March 2024’s increase in volume across all asset classes which we covered in our Monthly Report for the month and only continues to grow - a great sign after the second half of 2023 experiencing a decrease in volumes.

Available on STM Charts

This week’s trading activity is largely led by subscriptions and redemptions for BUIDL along with the introduction of the USDC near instantaneous transfers. BUIDL accounted for ~$13.5M of the US volume, $2,100,150 of which we saw on April 11th.

For more insights, please visit STM Charts on STM.Co!

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Hello members,

We’ve long discussed how crypto companies would all eventually turn to tokenization. Well the largest stablecoin in the industry proves this trend is now in full swing. The real flippening isn’t between Bitcoin and Ethereum, it’s between crypto and RWAs. A peak of $3 Trillions in total combined crypto market value is still just a sliver of what is represented in equities, bonds, and real estate EACH alone. By my current indications, we will see this flippening occur in 2027. If I am right, that’s just three years from RWAs being a bigger market cap than cryptos, possibly sooner. 

Strap in! Be sure to join us at TokenizeThis in May. 

Happy tokenizing,
Herwig
CEO, Security Token Group 
@tokenwig

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