🤝 Security Token Prime Insights: 4/8/2024

Exclusive Intelligence for Security Token Prime Members

April 08, 2024

Summary and Key Takeaways

1. Galaxy Digital Brings its Tokenization Division Live with GK8

Galaxy Digital, one of the original premier asset managers and investment firms in the digital assets space since 2017 who has recently surpassed $10 billion in AUM, is slowly getting involved in tokenization and the real-world assets space. Working directly with its portfolio company GK8, whom Galaxy acquired in 2023 for $44 million out of the Celsius bankruptcy portfolio, the duo will offer the minting of tokens across a wide range of Layer 1 and Layer 2 blockchains and their associated token standards through the Tokenization Wizard. GK8’s original claim to fame was its utmost focus on cold storage and insurance offerings of up to $1 billion. While currently unclear the exact route Galaxy will go with regards to client-facing tokenization and hosting, the initial product within the Tokenization Wizard will be the AllUnity euro-denominated stablecoin announced in November 2023 in partnership with Galaxy, DWS, and Flow Traders.

2. Acura Capital and Patex Launch Digital Bank for RWAs in Latin America

Acura Capital with $1.8 billion in assets under management and $3 billion under custody in Brazil partnered with Patex, one of the largest RWA ecosystem networks in Latin America including its own Layer 2 blockchain for tokenization, to provide digital banking services to clients and businesses within Latin America. The joint venture is designed to onboard and service 670 million addressable users for tokenization, compliance, issuance, secondary trading, lending, and other typical necessities and desires within this space. Brazil’s Ministry of Finance and Central Bank is an advising group to this initiative and will work to translate Pix (the current real-time payment system in Brazil) to blockchain-based Patex tokens. Patex Digital Bank solutions will be applied to individuals, businesses and commerce, and institutional cases alike.

3. Ripple adds Fuel to the Treasury-backed Token Fire

Ripple, whose XRP token is the 6th largest crypto by market capitalization at time of writing, is now offering a USD denominated stablecoin fully backed by US dollar deposits, short-term US Treasurys, and other cash equivalents. Our team has been writing much about the difference between tokenized money market funds, tokenized treasuries, and general stablecoins. Many larger institutions and corporations want to see pure plays and certain covenants and entity structuring in place. That sometimes omits certain stablecoins like Tether (USDT), which offers a majority backing by treasuries and cash but also utilizes BTC exposure.

Ripple and XRP specifically were developed to be the digital payments ledger and platform of the capital markets. Stablecoins largely took on that role, surpassing $150 billion in supply recently and continuing to show new product additions to the cohort. Ripple’s stablecoin will likely be their onboarding and settlement token for RWA and tokenized product transactions, ensuring simpler denomination than a fluctuating XRP value.

Notable Market Headlines

Institutional Activity

STM Data

This week’s Security Token Market graph comes from the real estate asset class breakdown in the March 2024 monthly market report.

Real Estate

  • Market Cap: $202,310,429 (-12.97% MoM)

  • Volume: $271,033 (151.12% MoM)

Real estate tokens have demonstrated a decrease in market cap, however trading volume has significantly grown compared to last month. A significant portion of these changes can be attributed to activity on March 20th, 2024 where we saw 32,286 ASPD sold, approximately $96,858 worth.

This large-volume day for Aspen Coin dropped the market cap by around $10M for the day to $52,105,167, making it a challenge to come back to the beginning of the month’s $65,826,194 market cap.

While the data team at STM mainly focuses on secondary markets, the team also keeps an eye on primary markets for interesting offerings and for what could start trading in the future. This month we’d like to highlight the Tuscany National Real Estate Token offering by Park Street Development & Buena Vista Hospitality Group via tZERO. This token secures a stake in the Tuscany National Resort & Club — an exciting property in Cortona, Italy set to open Fall 2024.

We held a webinar on March 27th via Security Token Prime with Scott and Courtney Brown from the Tuscany National Token team. Watch below to learn more and explore the offering here.

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Happy tokenizing,
Herwig
CEO, Security Token Group 
@tokenwig

Helpful Resources

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