SEC, Ripple ink $50M settlement agreement (CoinDesk)
Ripple Labs and the U.S. Securities and Exchange Commission (SEC) have officially reached a deal that, if approved by a judge, will bring their years-long legal battle to a close. According to a settlement agreement filed in New York on Thursday, both parties have agreed to a $50 million penalty — a portion of the $125 million fine initially imposed last year by Judge Analisa Torres of the Southern District of New York (SDNY), and a tiny fraction of the massive $2 billion fine initially requested by the SEC. [Read more at the SEC]
Stripe accelerates the utility stablecoins (Stripe)
Stripe launched Stablecoin Financial Accounts, new money management capabilities powered by stablecoins, which will be accessible to businesses in 101 countries. This comes three months after Stripe completed its acquisition of stablecoin platform Bridge. With these new accounts, businesses will be able to hold a balance in stablecoins, receive funds on both crypto and fiat rails (like ACH and SEPA), and send stablecoins almost anywhere in the world. These accounts will allow entrepreneurs in countries with volatile currencies to hedge against inflation and more easily access the global economy. Stripe will start by supporting two dollar-denominated stablecoins—USDC and Bridge’s USDB—and plans to add others over time. [Read more at Stripe]
US SEC considers tokenization-related conditional exemptions (SEC)
The U.S. Securities and Exchange Commission (SEC) is considering a potential exemptive order that would allow firms to use distributed ledger technology (DLT) to issue, trade, and settle securities without having to comply with certain registration requirements that may be ill-suited for this technology. This potential conditional exemption from certain SEC registration requirements and associated rules would allow firms to use innovative trading systems for eligible tokenized securities. The contemplated exemption would be conditional. Exempted entities would comply with market integrity conditions for the prevention of fraud and manipulation. This sketch of a potential exemption is a work-in-progress. There would be other conditions, but the goal is to formulate a commercially feasible approach that protects investors, including by ensuring that they have the benefit of cutting-edge technologies for trading, clearing, and settling securities. [Read more at the SEC]
Empirical analysis of cross-border Bitcoin, Ether and stablecoin flows (BIS)
The BIS published the results of an empirical investigation of trends and drivers of cross-border flows of Bitcoin (BTC), Ethereum (ETH), Tether (USDT) and USD Coin (USDC) between 184 countries from 2017 to 2024. These flows are substantial, peaking at around $2.6 trillion in 2021, with the two stablecoins (USDT and USDC) accounting for close to half the volume. The bilateral data allow for the estimation the drivers of these flows in a gravity framework, and how they differ across different types of crypto-assets. The findings highlight speculative motives and global funding conditions as key drivers of native crypto-asset flows. Transactional motives play a significant role in cross-border flows for stablecoins and low-value BTC transactions, where a strong association with higher costs of traditional remittances is found. [Read more at the BIS]
Coinbase acquires crypto derivatives exchange Deribit (Ledger Insights)
Coinbase has agreed to acquire Deribit, the largest crypto options exchange for $2.9 billion, including $700 million in cash with the balance in stock. Coinbase already has a derivatives subsidiary, which is particularly active in perpetual futures. The transaction is expected to close by the end of the year, subject to regulatory approvals. [Read more at Ledger Insights]
An investment perspective on tokenization: Parts 1 and 2 (CFA Institute)
The CFA Institute has published two reports on tokenization. The first one discusses distributed ledger technology, the various models of tokenization, and the processes involved. It also considers the benefits and limitations of tokenization in areas like clearing and settlement, transparency and compliance, and market access. The report further includes case studies from interviews with firms and digital finance professionals on the impact of tokenizing investment products. The value proposition of tokenization revolves around improvements in clearing and settlement, transparency and compliance, and fractionalization and market access. Limitations and challenges include cybersecurity risks, regulatory uncertainties, a still-fledgling market infrastructure, and the issue of whether it makes sense to grant easier access to private market investments for retail investors. [Read more at the CFA Institute]
The second part focuses on the legal and regulatory developments considered necessary to support the tokenization industry. It also analyzes international and supranational standards and proposals by non-governmental bodies and provides a comparative cross-jurisdictional analysis of regulatory sandbox initiatives. The key takeaways are that the growth of digital assets and tokenization requires legal and regulatory frameworks to address issues related to property rights, cross-border recognition and compliance, enforcement rights, and jurisdictional remit, and that global regulatory cooperation and measures to safeguard stakeholders are a priority for regulators and policymakers. [Read more at the CFA Institute]
Upcoming Speaking Engagements:
The CB+DC Conference (Nassau, Bahamas, September 9-11) is a premier gathering centered on CBDCs, tokenized assets, and stablecoins. It provides a forum for central bankers, commercial bankers, technology innovators, policymakers, and academics to explore the latest advancements in digital currency, engage with experts and peers, and discuss the future of digital currency. [Register here but before you do, email me at john@kiffmeister.com for a 15% discount]
And just a reminder that I produce a monthly digest of central bank digital currency (CBDC) developments exclusively for the official sector. So (only) if you work at a central bank, ministry of finance or international financial institution (e.g., the BIS, IMF, OECD, World Bank) and who would like to receive it by email on the first business day of every month, please DM me on LinkedIn or email me at john@kiffmeister.com.
