Kiffmeister’s #Fintech Daily Digest (01/28/2021)*

Grayscale has incorporated six more trusts

Grayscale has incorporated six more trusts, tied to Polkadot (DOT), Aave (AAVE), Monero (XMR), Cardano (ADA), Cosmos (ATOM), and EOS.IO (EOS). All the six trusts were formed Wednesday by Delaware Trust Company, Grayscale’s “statutory trustee.” The new trust formations come a week after Grayscale incorporated six more trusts, including for Chainlink (LINK) and Tezos (XTZ) tokens. However, trust formations do not mean the firm will launch these products.

Binance survey finds that ‘hodlers’ still dominate crypto

Most crypto-asset users prefer to hold their crypto as part of a long-term investment strategy, according to a Binance Research global survey (61,000 crypto users across 178 countries and regions from September 15 to October 25, 2020. 39% of respondents stated that their “usage” of crypto is dominated by hodling, 28% prefer to use most of their crypto for buying other cryptos, and 22% said that they mainly use their crypto for staking and lending. The remaining 11% said that they mainly use their digital coins for payments.  

Facebook’s Diem Testnet Hits 50 Million Transactions

The testnet for Diem reached over 50 million transactions on January 27, data from blockchain explorer inDiem shows. It operates at an average throughput of over 3 transactions per second (tps). While sounding fast, this is much slower than transactions on both Bitcoin (4.6 tps) and Ethereum (15 tps), and much slower to the speeds on upcoming networks like Solana (65,000 tps). In terms of testnet users, over 221,000 individual addresses have interacted with Diem in some capacity. 

The Tokenization of Assets and Potential Implications for Financial Markets

The OECD published a paper on asset tokenization; the digital representation of real (physical) assets on distributed ledgers, or the issuance of traditional asset classes in tokenized form. It examines the benefits of tokenization and the challenges to its wider adoption, and the potential disruptive effect on trading, liquidity, pricing, clearing and settlement. It also highlights the increased importance of a trusted and credible central authority in a tokenized environment (such as a custodian), and sheds light to the possible necessity for a tokenized form of central bank digital currency or stablecoin for the payment leg of security settlement on DLT-based trading venues. 

* The views expressed herein are those of the author and should not be attributed to the International Monetary Fund, its Executive Board or its management.