Blockchain In Finance

This was long overdue. European banks are finally stepping into the stablecoin play. Here’s the context you won’t find in the headlines. Stablecoins are the most serious challenger to the banks’ business model: • Instead of money sitting in bank accounts, it moves into tokens. For banks, that can erode their cheapest and most stable source of funding. • Stablecoins enable instant, on-chain settlement across borders, cutting banks out of payment flows and fee pools tied to card schemes and correspondent networks. • Stablecoins operate 24/7 and settle in real time, allowing corporates to manage liquidity continuously - and threatening banks’ cash-management revenues. And yet if banks don’t adopt stablecoins, they risk being pushed out of the digital money layer entirely. 𝗧𝗵𝗲 𝗺𝗮𝗿𝗸𝗲𝘁 Nearly the entire stablecoin market - about 99% - is tied to the US dollar. Why? • The dollar is the world’s reserve currency and the dominant settlement asset in trade and finance. • Stablecoin providers peg to USD because that’s where institutional demand and deep liquidity are. • The more activity that happens in USD stablecoins, the harder it becomes for other currencies to gain adoption. 𝗪𝗵𝗮𝘁 𝘁𝗵𝗶𝘀 𝗺𝗲𝗮𝗻𝘀 𝗳𝗼𝗿 𝗘𝘂𝗿𝗼𝗽𝗲 • European banks and corporates risk becoming price-takers in a dollar-denominated digital ecosystem. Even if a payment moves between two European parties, if it's in USD stablecoins, it runs through US-centric infrastructure. • Because euro liquidity in stablecoins is still thin, Europe lacks the depth to build robust digital financial rails of its own – leaving banks and corporates dependent on dollar flows. • Without credible euro-based stablecoins, Europe risks losing the race in programmable money and embedded finance. 𝗧𝗵𝗲 𝗿𝗮𝘁𝗶𝗼𝗻𝗮𝗹𝗲 The above is exactly what the banks' coalition wants to address. • A euro stablecoin gives European banks and corporates digital money in their own currency. • Via the euro stablecoin banks get to keep deposits and yield, unlock new revenues, stay central to digital markets, and align with regulators’ push for sovereign, supervised money. • MiCA (the European digital assets regulation) forces issuers to hold fully backed, transparent reserves, audited under EU supervision. • A euro stablecoin needs scale, liquidity, and trust — no bank can achieve that alone, but many banks together can pool balance sheets, customers, and credibility to make it viable. • Banks can embed the stablecoin directly into accounts, treasury products, and settlement systems from day one. • European corporates will prefer a euro-native stablecoin for settlement, liquidity, and embedded finance over USD tokens that expose them to FX risk and US regulatory dependence. The question is: will European banks manage to break the dollar's stablecoin monopoly? Opinions: my own Subscribe to my newsletter: https://lnkd.in/dkqhnxdg

🚨 NEW: 10 Global Banks Just Revealed Their Stablecoin Alternative Plan - For G7 currencies. FX is going onchain, to public chains(!) --- Santander, Bank of America, Barclays, BNP Paribas, Citi, Deutsche Bank, Goldman Sachs, MUFG, TD Bank, and UBS announced they're jointly exploring a 1:1 reserve-backed stablecoin for G7 currencies 👉 On public blockchains. This is ten systemically important banks saying: we're going to issue regulated digital money on Ethereum and other public chains. --- There's a pattern emerging here. Three weeks ago: Nine European banks (ING, UniCredit, Danske, DekaBank, Banca Sella, KBC, SEB, CaixaBank, Raiffeisen) announced a MiCAR-compliant euro stablecoin, targeting H2 2026 launch. Two weeks ago: Swift announced it's building a blockchain-based shared ledger with 30+ global banks, focused on 24/7 real-time cross-border payments. Banks are building blockchain payment infrastructure at institutional scale. And always with a "settlement asset" Why? --- Because there's no central bank for the internet. Domestically, real-time, 24/7 is entirely possible; many countries have it. The Central Bank plays a key risk management role. The world, and the internet has no central bank. So cross-border is much harder. --- This means - Stablecoins are cheaper in exotic currencies - TradFi FX is much cheaper in G7 currencies - Somewhere in the middle cross-border treasury and remittances all use USD, and stablecoins are a great way to do that. The banks HAD to react. --- There's a real business case. Major banks already move G7 currency pairs at 1-6 basis points—99% margins. Bank tokens could make those flows even MORE efficient. That's not what crypto advocates expected --- For years, banks insisted they needed permissioned chains. Now they're explicitly exploring "a stable payment asset available on public blockchains." The stablecoin wars escalated. Bank balance sheets, deposit insurance, day-one G7 regulatory compliance, and the credibility of Goldman, Citi, and UBS. This won't happen over night, but the implication is clear --- This isn't banks vs crypto anymore. It's banks using onchain infrastructure. JPMorgan piloted JPMD. HSBC launched tokenized deposits. Apple, Airbnb, Uber, and X are reportedly exploring stablecoin integration. Everyone converged on the same truth: programmable money that settles instantly, 24/7, is the future. Some on Ethereum. Some on Swift's ledger. Some on private networks. Most likely? All of the above, with interoperability connecting them. What's your read? Are bank stablecoins DOA or is this inevitable institutionalization?

NYSE just announced a securities tokenization platform. $40+ Trillion in equities are coming onchain. This is not a pilot or a proof of concept. And not a “crypto experiment.” The New York Stock Exchange (NYSE) is building infrastructure for tokenized securities as a core market primitive. Today’s equity markets still run on legacy rails. • T+2 settlement • Multiple clearing layers • Fragmented global access • Capital locked in intermediaries Tokenization turns things upside down. Under the new regime, onchain securities enable: • 24/7 markets • Near-instant settlement • Atomic delivery vs payment • Global distribution by default But key detail is how NYSE is executing this shift. The existing exchange will keep operating as it does today, while a new tokenized securities platform runs in parallel. Same institution, but two market regimes. This approach allows capital markets to migrate without forcing an abrupt transition or breaking existing workflows. This parallel setup also gives the rest of the industry time to realign: → 𝗥𝗼𝗯𝗶𝗻𝗵𝗼𝗼𝗱 is preparing for equities to trade as programmable, onchain assets. → 𝗖𝗼𝗶𝗻𝗯𝗮𝘀𝗲 is positioning as the gateway for tokenized equity distribution and custody. → 𝗗𝗧𝗖𝗖 is tokenizing clearing, settlement, and collateral to modernize market plumbing. As these players converge, the shift becomes structural rather than theoretical. Settlement cycles collapse. Capital efficiency improves. Market access becomes global by default. When NYSE commits to running both systems side by side, it’s a clear signal. Capital markets are not experimenting with blockchain. They are adopting it. P.S. If this is not proof that web3 is going mainstream, then what is? ________________________________________________________ 👋 I’m Aram, helping web3 leaders & B2B businesses grow on 𝗖𝗿𝘆𝗽𝘁𝗼 𝗟𝗶𝗻𝗸𝗲𝗱𝗜𝗻. ♻️ Repost this to help others in your network. 📌 Follow Aram Mughalyan for daily crypto insights & LinkedIn growth tactics.

I thought I was done with prudential policy after my time at ISDA - but clearly, I was wrong! The global financial system is changing, and fast. Tokenised government bonds, regulated crypto ETFs, and fully-backed stablecoins are no longer experiments, they’re part of financial markets today. However, as a new letter and report published by Global Blockchain Business Council (GBBC), Global Digital Finance, GFMA, ISDA and other leading trade associations argues, banks - the very institutions best placed to bring oversight, governance, and scale to these innovations - are being held back by the current Basel Committee on Banking Supervision (BCBS) Cryptoasset Standard. The problem? 1️⃣ 𝐏𝐮𝐧𝐢𝐭𝐢𝐯𝐞 𝐜𝐚𝐩𝐢𝐭𝐚𝐥 𝐫𝐞𝐪𝐮𝐢𝐫𝐞𝐦𝐞𝐧𝐭𝐬 - a 1250% risk weight for many crypto exposures treats them as if they were toxic, regardless of actual risk profile. 2️⃣ 𝐎𝐧𝐞-𝐬𝐢𝐳𝐞-𝐟𝐢𝐭𝐬-𝐚𝐥𝐥 𝐭𝐫𝐞𝐚𝐭𝐦𝐞𝐧𝐭 - permissionless blockchains vary widely in governance and security, yet the rules don’t recognise these nuances. 3️⃣ 𝐌𝐢𝐬𝐬𝐞𝐝 𝐨𝐩𝐩𝐨𝐫𝐭𝐮𝐧𝐢𝐭𝐢𝐞𝐬 𝐟𝐨𝐫 𝐬𝐭𝐚𝐛𝐥𝐞𝐜𝐨𝐢𝐧𝐬 - ignoring real-world prudential improvements, evolving stablecoin models, and regulatory advances.  We believe the BCBS framework can, and should, evolve. By adopting a risk-sensitive, technology-neutral approach guided by the principle of 𝘴𝘢𝘮𝘦 𝘢𝘤𝘵𝘪𝘷𝘪𝘵𝘺, 𝘴𝘢𝘮𝘦 𝘳𝘪𝘴𝘬, 𝘴𝘢𝘮𝘦 𝘳𝘦𝘨𝘶𝘭𝘢𝘵𝘪𝘰𝘯 we can achieve the following: ⚖️ Keep innovation inside the regulatory perimeter; 🌐 Support a level playing field across markets; and 💱 Ensure that banks can play their role in connecting traditional and digital finance safely. Updating the BCBS framework doesn’t mean lowering standards - it means building ones that are fit for purpose in a digital era. 📖 Read more in my op-ed with Matthew Osborne in The Banker: https://lnkd.in/gr-MX3Bu

2nd Global Cryptoasset Regulatory Landscape Study by University of Cambridge and Swiss Secretariat of Economic Affairs SECO The global #Blockchain and #Cryptoasset landscape is evolving rapidly, with regulators facing the challenge of balancing financial innovation and risk mitigation. The Cambridge Centre for Alternative Finance (CCAF) has released its second comprehensive study on the #Cryptoasset regulatory environment, analyzing approaches across 19 jurisdictions. Key Findings: 🔹 Diverse Regulatory Approaches Regulatory frameworks remain highly fragmented, with some jurisdictions embracing bespoke regulations while others retrofit existing frameworks. Some Emerging Markets and Developing Economies (EMDEs) continue to impose bans, often due to concerns about currency substitution and capital outflows. 🔹 Stablecoins & Market Integrity #Stablecoins are a key focus for regulators, with Advanced Economies (AEs) leading regulatory developments. While ensuring stability and redeemability remains a priority, approaches to reserves and governance structures vary significantly. 🔹 Classification & Definitions Remain Inconsistent Jurisdictions differ on terminology—terms like "cryptoasset", "virtual asset", and "digital asset" are used inconsistently. Many regulators prioritize consumer protection and classify cryptoassets as speculative investments rather than currencies. 🔹 Licensing & Compliance for Cryptoasset Service Providers (CASPs) Regulators are tightening requirements for #FinTech firms offering staking services, custody, and exchange operations. Some jurisdictions mandate that a share of customer cryptoassets be stored in cold wallets for security purposes. 🔹 Anti-Money Laundering (AML) & Consumer Protection AML compliance remains a regulatory priority, with most jurisdictions aligning with FATF standards. Measures such as blacklists of non-licensed firms, advertising restrictions, and financial literacy initiatives are being deployed to protect retail investors. 🔹 Future Outlook: Regulation of DeFi & Tokenization The study highlights early regulatory initiatives around Decentralized Finance (DeFi) and the tokenization of financial instruments, though regulatory frameworks in these areas remain nascent. Authors & Contributors: 📄 Research Team: Hugo Coelho (Principal Researcher), Alexander Apostolides, Keith Bear, Nick Clark, Natalia Cordeiro de Lima Fleichman, Kalliopi Letsiou, Aarvi Singh, Bryan Zhang 🔍 Reviewers & Contributors: Parma Bains (IMF), Cristina Cuervo (IMF), Nobuyasu Sugimoto (IMF), Jon Frost (BIS), Jamere McIntosh (BIS), Nico Hess (FINMA), Yann Thorens (FINMA), Gabrielle Inzirillo (ADGM), Dr Rhys Bollen (ASIC), David Halperin (ASIC), Joachim Schwerin (European Commission), Thomas Puschmann (Global Center for Sustainable Digital Finance, Stanford & Zurich University), Dea Markova (Forefront), Charles Kerrigan (CMS), Mike Ringer (CMS), Gabriel R. Bizama (University of Bern). #Blockchain #FinTech #DeFi

Asset tokenization is getting framed too often as a crypto story. This World Economic Forum report makes a different point. It argues that the real shift is market structure. Tokenization can give financial markets a shared system of record, flexible custody, programmability, fractional ownership, and composability. That means better visibility of ownership, faster settlement, lower admin friction, and easier collateral movement across products and venues. The part I found most useful is the report’s focus on where tokenization fits first. It points to issuance, securities financing, and asset management as the clearest use cases. Bonds stand out early. The report notes that 65% of financial institutions surveyed by OMFIF saw bonds as the most likely asset class to be tokenized, and it says DLT can automate up to 2,000 tasks in bond issuance, cut 800 to 1,000 person hours, and reduce book-closing periods by more than 50%. That matters for a simple reason. The first winners in tokenization may not be retail investing apps. They may be treasury desks, issuers, custodians, and collateral managers. Markets with high manual workload, slow reconciliation, and trapped liquidity have the strongest reason to change first. If a process already works well, the case for rebuilding it is weaker. If a process is costly and fragmented, the case becomes stronger. The report also highlights collateral as a major opportunity. It estimates programmable ledger-powered collateral management could unlock more than $100 billion annually in capital that can be redeployed. That shifts the conversation from tokenized assets as investment products to tokenized assets as balance sheet tools. For large institutions, that may be the bigger prize. Another strong point is regional adoption. Advanced markets may use tokenization to improve efficiency at the margin. Emerging markets may use it to leapfrog older infrastructure and widen access. That means adoption paths will not look the same everywhere. In some regions, tokenization is an upgrade. In others, it can be a shortcut. The report is just as clear on the hard part. Tokenization will not scale on tech alone. Legacy integration, weak global standards, limited interoperability, thin secondary markets, and privacy and compliance issues still stand in the way. It even makes a point that tokenization will change intermediary roles, not erase them. That is an important distinction. The next phase is less about replacing institutions and more about rebuilding coordination across them on better rails.  My main read: tokenization is not just about putting assets on-chain. It is about turning financial infrastructure from message passing into shared state. The upside is not only new products. It is cleaner issuance, better collateral mobility, stronger transparency, and a market structure that can work with more speed, clarity, and reach. Report by World Economic Forum

Financial Conduct Authority - Progressing Fund Tokenisation 1️⃣ The UK’s Next Big Move in Finance - The FCA has launched CP25/28 – Progressing Fund Tokenisation, outlining how authorised funds can move on-chain using distributed ledger technology (DLT). The UK aims to become a global hub for tokenised asset management. 2️⃣ Efficiency Through Direct Fund Dealing - A new “Direct to Fund” (D2F) model will allow investors to deal directly with funds rather than intermediaries — improving efficiency, cutting costs, and aligning the UK with Ireland’s fund models. 3️⃣ Tokenised Money Market Funds (tMMFs) - The FCA supports using tokenised MMFs as collateral for derivatives — citing pilot projects like Aberdeen Investments, Archax, and Lloyds Bank — enabling faster, transparent, and programmable collateral management. 4️⃣ Pathway to Stablecoin Settlement - The paper explores using qualifying stablecoins (as defined in the upcoming UK regime) to settle fund transactions, laying groundwork for fully on-chain fund operations supported by the Digital Securities Sandbox. 5️⃣ Global Coordination & Project Guardian - The FCA is collaborating internationally with the Monetary Authority of Singapore (MAS) and IOSCO through Project Guardian to harmonise tokenisation standards and cross-border fund interoperability. Real-Life Example - Aberdeen Investments, Archax, and Lloyds Banking Group recently completed the UK’s first live pilot using tokenised MMF units and UK gilts as collateral for FX trades — a clear signal of how regulated institutions can adopt blockchain for operational efficiency. Why It Matters - This marks the institutionalisation of tokenisation. By embedding DLT in the UK’s £14.3 trillion asset management industry, the FCA is unlocking $135 billion in potential savings through faster settlement, lower reconciliation costs, and greater transparency. - It also signals the regulator’s confidence that blockchain can coexist with robust investor protection and regulatory oversight. What Happens Next Expect: - The UK’s first fully tokenised authorised funds in 2026. - Expansion of the Digital Securities Sandbox for on-chain settlement. - Integration of qualifying stablecoins for fund unit transactions. - Wider industry pilots connecting tokenised MMFs, stablecoins, and DLT-based fund registers.

#FinTech | #Regulation - 🚨 Big move from the Financial Conduct Authority on #Cryptoasset Regulation 🚨 The UK Financial Conduct Authority (FCA) has just published its long-awaited Consultation Paper (CP25/25) on how the FCA Handbook will apply to regulated cryptoasset activities. This is a major milestone in bringing crypto firmly inside the UK’s regulatory perimeter. So, what’s changing? 🔹 Scope of Regulation Expands For the first time, activities like #stablecoin issuance, #custody, trading platforms, intermediation, and staking will all fall under the FCA’s remit. Firms must seek authorisation under FSMA before carrying out these activities in the UK. 🔹 “Same Risk, Same Regulatory Outcome” Crypto firms will now face requirements already familiar to traditional finance firms, including: Senior Managers & Certification Regime (SM&CR) – personal accountability at leadership level. Operational Resilience standards – stress-testing for outages, hacks, or validator failures. Financial Crime rules – AML/CTF, the Travel Rule, and stronger systems against fraud and scams. High Level Standards (PRIN, COND, GEN) – conduct, governance, and treating customers fairly. 🔹 Consumer Protection is Front & Centre The FCA is clear: crypto harms are real. Their research shows: 26% of UK crypto users have been targeted by scams, with 10% losing money Many consumers wrongly believe they have financial protections when buying crypto. The proposed rules aim to reduce risks like mis-selling, poor disclosures, hacks, and the infamous “single point of failure” (think Quadriga or FTX collapses). 🔹 Economic Impact The FCA’s cost-benefit analysis estimates: £130m in reduced losses from scams over 10 years. £92m in compliance costs for firms (IT, governance, reporting) In short: stronger markets, fewer consumer losses, but firms must invest heavily in compliance. 🔹 A Global Signal The FCA isn’t acting in isolation. With the EU’s MiCA, US debates around stablecoin laws, and Asia tightening rules, this consultation shows the UK wants to position itself as a safe but competitive hub for digital assets. This is not the end of “wild west crypto” in the UK—it’s the start of a maturing market where innovation can scale within clear guardrails. Firms that can adapt will benefit from higher trust and access to institutional adoption. Those that can’t may struggle to survive.

🔴 BNY’s tokenized cash launch reinforces the idea that U.S. capital markets will soon operate with a fully tokenized collateral stack👇 [CONTEXT] On Friday, the world’s largest custodian, BNY Mellon, announced the launch of a service enabling the onchain representation of traditional cash. 👉 BNY Mellon will begin with "collateral and margin workflow use cases,” meaning using tokenization and tokenized deposits to enhance critical institutional workflows, including collateral management, margin calls, and intraday liquidity, before pursuing any broader ambitions in payments. A step-by-step, custodian-led approach. 🎯What will BNY’s clients be able to do? → Use tokenized cash as collateral, notably for margin purposes. → Perform intraday settlement and reconciliation, a significant step forward for position management and treasury operations. All while benefiting from the same legal protections as traditional bank deposits, including deposit-style safeguards and yield treatment, and being available 24/7. This represents a fundamental difference from what is currently developing in crypto-native DeFi. 🌐 For now, the underlying blockchain networks have not been disclosed. However, likely, the service will initially leverage the Canton Network, developed by Digital Asset, which has seen a wave of funding rounds and large-scale experiments with major financial institutions over the past two years. This week, JPMorgan also announced the deployment of its tokenized cash on the Canton Network, following an earlier rollout on Base, Coinbase’s Layer 2 → Other banks are expected to follow with their own tokenized cash offerings, usable under similar conditions, including UBS, Citi, Bank of America, and HSBC. And this is where things are going to get interesting👇 🎯 One more building block toward large-scale tokenization In December, the Canton Network announced a partnership with DTCC, which sits at the center of U.S. capital markets, safeguarding more than $100 trillion in assets and processing over $3.7 quadrillion in securities transactions each year. → Initially, the partnership will focus solely on experiments involving tokenized U.S. Treasuries, before being extended to the largest U.S. equities. → In this race, Nasdaq and Coinbase are already competing fiercely, something that will only accelerate the pace of adoption. If developments continue at this pace, U.S. capital markets could soon operate with a fully tokenized collateral stack, likely unfolding first on semi-public networks such as the Canton Network. …before truly scaling on fully public blockchains like Ethereum (my take). At Blockstories, we’ll be following this closely in our Institutional Briefing, a weekly newsletter on institutional developments in digital assets. To subscribe, you’ll find the link in the first comment👇

A Financial Services Consumer Panel response to FCA's CP25/28 consultation on Progressing Fund Tokenisation(Chapters 2 to 4). Consumer expectations in investing are shifting fast. The FCA Consumer Panel highlights in the consultation response a clear generational divide: 🔹 47% of neo-broker users are aged 18–34, while 49% of traditional platform users are 55+. 🔹 66% of young investors make decisions within 24 hours, with 14% acting in under an hour—often influenced by social media and FOMO. 🔹 Younger investors are 80% more likely to hold ETFs, showing their preference for flexible, real-time trading and fractional ownership. 👉 These trends underline the urgent need for clearer disclosures, intuitive product frameworks, and platforms designed for digitally native consumers. Here are the main themes from our response: 🔹 Innovation must not compromise investor safeguards. Tokenised funds should provide equivalent rights, transparency, and recourse as traditional systems. 🔹 Concerns about cloud dependency, private key control, interoperability gaps, and smart contract failures. 🔹 Need for clear rules on liability, dispute resolution, privacy safeguards, and legal domicile when using public blockchains. 🔹 Call for plain-language, standardised disclosures (e.g., one-box summaries) on risks, insolvency, FSCS applicability, and dealing structures. 🔹 Require human oversight (“human-in-the-loop”) for eligibility checks and remediation. 🔹 Support for use of digital cash/stablecoins, with caps, segregation, auditability, and disclosure.  🔹 Clarify legal domicile and resilience standards for public blockchain use. 🔹 Retain Consumer Duty but supplement with cryptoasset-specific rules and guidance. To dive into the details of this consultation response and the comprehensive list of the Panel's other consultation responses, please visit: https://lnkd.in/edtPuzhV #ConsumerProtection #CryptoRegulation #FCA #Stablecoins #Cryptoassets #Fintech #InnovationStrategy #FinancialServices #RegTech #DigitalFinance