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Deutsche Bank-Backed Taurus Starts Tokenizing German SME Loans
Swiss crypto custody firm Taurus, backed by Deutsche Bank, has partnered with Zurich-based fintech lending platform Teylor to delve into the tokenization of assets, particularly targeting the German SME market. Teylor's credit portfolio tokens, structured by Allen and Overy, will be available for secondary market trading on Taurus' TDX marketplace. This tokenization, involving a Luxembourg-based investment vehicle, adheres to Swiss and European regulations. Taurus co-founder Lamine Brahimi expects significant institutional investment in the coming weeks for this tokenized debt product. Taurus' TDX market, alongside its custody services, has completed over 20 transactions involving various assets, totaling over $1 billion in notional value. Teylor, supported by investors such as Barclays, focuses on loans to Germany's Mittelstand economy, ranging from 100,000 to 1.5 million euros, and has recently issued nearly $25 million in loans. The loans to be tokenized will support a range of German businesses, from industrials and chemicals to precision machinery and import/export, indicating the growing global trend of tokenizing traditional financial assets.
Fnality Starts First Phase of Payment Operations Using Funds at Bank of England
Fnality, a London-based blockchain payments firm, has initiated the first phase of live transactions using digital funds represented at the Bank of England. This phase, involving the Sterling Fnality Payment System, sees participation from Lloyds Banking Group, Banco Santander, and UBS. The system integrates the security of central bank funds with the innovative features of blockchain technology, aiming to establish a global liquidity management ecosystem in wholesale financial markets and tokenized asset markets. The initial live transactions mark a step towards a larger multi-jurisdictional goal, though they are currently under operational limits set by the Bank of England. CEO Angus Fletcher stated that Fnality's focus for 2024 is on scaling operations within the Bank of England's regulatory framework and exploring new market use cases. Last month, Fnality raised $95 million in a funding round led by Goldman Sachs and BNP Paribas, with participation from DTCC, Euroclear, Nomura, WisdomTree, and several bank backers.
U.S. CFTC Approves Bitcoin Futures Platform Bitnomial's Derivatives Clearing Application
The Commodity Futures Trading Commission (CFTC) has approved Bitnomial to register as a derivatives clearing organization in the U.S., allowing the company to settle margined futures and options contracts tied to Bitcoin. The decision came with a 2-1 vote, with CFTC Commissioner Kristin Johnson and Chairman Rostin Behnam voting in favor, while Christy Goldsmith Romero opposed. Commissioners Caroline Pham and Summer Mersinger concurred with the majority. Bitnomial, which has been operational for four years, previously had approval to list futures and options contracts as a designated contract market and to trade with customers as a futures commission merchant. Following a debate over conflicts of interest, the CFTC approved Bitnomial's application, paving the way for the company to expand its offerings in physical and digital commodities. Bitnomial CEO Luke Hoersten stated that the firm aims to broaden its product range and customer base, focusing on providing wholesale digital asset-related services to brokerage partners, institutions, and dealers.
Trading Desk Insights
In the realm of cryptocurrency trading, Bitcoin recently experienced a retracement, dipping to a session low of 41,400 before surging to as high as 43,400, representing a noteworthy 5% gain. Notably, a number of altcoins, particularly those associated with Artificial Intelligence (AI) tokens such as RNDR, FET, and AGIX, have shown strong positive performance.
Regarding Bitcoin's current upward trajectory, there appears to be ample potential for further growth. However, it's crucial to guard against the psychological trap of anchoring bias, which may tempt one to wait for more favorable entry prices, especially for those accustomed to the recent bearish market conditions. Various on-chain indicators, including the Puell Multiple, the MVRV Z-score, and the Mayer Multiple, consistently suggest that Bitcoin is far from being overvalued.
In the world of decentralized finance (DeFi), the Ledger Connect Kit software was recently exploited, causing ripple effects across several DeFi protocols. Notably, platforms like Lido, Metamask, and Sushi rely on this software for connecting to decentralized applications (dApps). The exploit reportedly prompts users with a pop-up, leading to the unauthorized draining of tokens.
Shifting gears to traditional financial markets, the Dow Jones Industrial Average continued its upward momentum on Thursday, building on the previous day's historic milestone of closing above 37,000 for the first time ever. This surge comes as the 10-year Treasury yield dropped below 4%, indicating increasing speculation on potential interest rate cuts in 2024. Additionally, the S&P 500 index is inching closer to reaching its all-time closing high set in January 2022, with a margin of less than 2%, while the Nasdaq index remains about 9% away from its previous record peak.
The Federal Reserve recently executed the expected dovish pivot during its December meeting, now anticipating three rate cuts in 2024. In contrast, the futures market is pricing in approximately 130 basis points (equivalent to around 6 rate cuts) by the end of 2024, reflecting an interesting divergence in expectations between the central bank and market participants.
Technical Charts
Disclaimer
This research is for informational use only. This is not investment advice. Other than disclosures relating to Secure Digital Markets this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates, and forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research as appropriate.
Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. The price of crypto assets may rise or fall because of changes in the broad market or changes in a company's financial condition, sometimes rapidly or unpredictably. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments. We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives, if any, referred to in this research.
The information on which the analysis is based has been obtained from sources believed to be reliable such as, for example, the company’s financial statements filed with a regulator, company website, company white paper, pitchbook and any other sources. While Secure Digital Markets has obtained data, statistics, and information from sources it believes to be reliable, it does not perform an audit or seek independent verification of any of the data, statistics, and information it receives.
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Crypto and/or digital currencies involve substantial risk, are speculative in nature and may not perform as expected. Many digital currency platforms are not subject to regulatory supervision, unlike regulated exchanges. Some platforms may commingle customer assets in shared accounts and provide inadequate custody, which may affect whether or how investors can withdraw their currency and/or subject them to money laundering. Digital currencies may be vulnerable to hacks and cyber fraud as well as significant volatility and price swings.
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