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Bank of England and FCA Unveil Digital Securities Sandbox
The Bank of England and the Financial Conduct Authority (FCA) have launched a Digital Securities Sandbox (DSS) to explore the use of distributed ledger technology (DLT) in the issuance, trading, and settlement of financial securities. Announced on Sept. 30, the sandbox aims to boost the UK's position as a global financial hub by enhancing market efficiency, transparency, and resilience. Open to firms legally registered in the UK, the DSS will run until December 2028, with applications closing in March 2027. The initiative allows for real digital securities to be tested and traded, aiming to create a sustainable and safe financial system while complying with UK regulations.
Ripple Secures In-Principle License Approval in Dubai
Ripple has received in-principle approval for a financial services license from the Dubai Financial Services Authority (DFSA), marking a key step towards offering cross-border crypto payment services in the UAE. Once fully licensed, Ripple will operate in Dubai's International Financial Center (DIFC) and facilitate seamless cross-border payments using both fiat and digital assets. The company views Dubai as a strategic hub for expanding its services across the Middle East, Africa, and South Asia. This move strengthens Ripple’s global regulatory presence while aligning with Dubai’s aim to become a leading fintech hub.
Australian Bank Joins Project Guardian to Explore Tokenization of Real-World Assets
ANZ, one of Australia's largest banks, has joined Singapore’s Project Guardian to explore the potential of tokenizing real-world assets (RWAs) in financial markets. Partnering with Chainlink Labs and investment firm ADDX, ANZ aims to test how assets like commercial papers can operate across different blockchains. The bank will use Chainlink’s Cross-Chain Interoperability Protocol (CCIP) to facilitate the transfer of its Australian dollar-backed A$DC stablecoin between blockchains. Project Guardian, launched by the Monetary Authority of Singapore, aims to improve market liquidity and efficiency through tokenization. Previous participants include S&P Global, Deutsche Bank, and JPMorgan's Onyx.
Trading Desk Insights
Bitcoin has recently experienced a pullback, despite having outperformed the equity markets and leading recent rallies. BTC retreated to $61,800, largely driven by macroeconomic conditions, but signs of recovery are emerging as open interest begins to rise. Altcoins are showing mixed results today, with profit-taking in response to Bitcoin’s decline. However, we are already starting to see a renewed uptick across several altcoin markets.
Notably, the supply of Bitcoin held by OTC desks has surged over the past five months, reaching 410,000 BTC—the highest level since May 2022. This elevated balance reflects strong liquidity and the capacity of trading desks to accommodate large transactions. However, for a sustained bull market, we may need to see a reduction in these OTC balances, signaling renewed demand. It appears that we’re in the midst of a broader bull cycle, with the market poised to push higher once retail volume re-enters. Early indicators of increased retail inflows suggest that we could be moving out of the consolidation phase and into an accumulation phase.
XRP has caught traders’ attention, with open interest now surpassing $1 billion. This surge is driven by growing anticipation for Ripple’s upcoming RLUSD stablecoin, currently in private beta on both the XRP Ledger and Ethereum blockchain.
Bitcoin mining profitability continues to face pressure, marking a third consecutive monthly decline in September. Increased mining difficulty, intensifying competition, and Bitcoin’s slower price growth are key factors driving this downtrend. Nonetheless, some miners remain profitable, benefiting from more efficient hardware and reduced energy costs.
In the ETF market, Bitcoin-focused funds saw inflows of $61.3 million, with Blackrock leading the pack, drawing in $72.2 million. On the other hand, Ethereum ETFs witnessed renewed outflows, though modest at $0.8 million.
Turning to economic data, the ISM Manufacturing PMI came in below expectations, pulling markets slightly lower. In contrast, the JOLTS Job Openings report exceeded estimates, signaling strength in the labor market.
Equities experienced a slight pullback on Tuesday as investors took profits after a strong month and quarter. While September is historically a challenging month for stocks, this year defied trends with all three major indices posting gains—the S&P 500 saw its first positive September since 2019. Despite Federal Reserve Chair Jerome Powell’s comments that the Fed is "not on any preset course" for rate decisions, expectations remain for two more rate cuts this year if economic conditions align.
In other developments, a significant dockworker strike at major U.S. seaports threatens to disrupt global supply chains. Prolonged strikes could result in product shortages for American consumers and ripple through the broader economy.
Crypto 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.
Unless otherwise provided in a separate agreement, Secure Digital Markets does not represent that the report contents meet all of the presentation and/or disclosure standards applicable in the jurisdiction the recipient is located. Secure Digital Markets and their officers, directors and employees shall not be responsible or liable for any trading decisions, damages or other losses resulting from, or related to, the information, data, analyses, or opinions within the report.
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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