Global Crypto News by Killerwhale
Welcome to the Global Crypto News hub! Articles by Killerwhale go over the news you may have missed that involves crypto, but had a real world effect. Sit back, relax, and enjoy! News is gathered throughout the week and posted every Saturday!
Mastercard's CBDC Solution: A Step Towards Global Financial Inclusion?
Although the dynamics of CBDC emergence vary from country to country and despite being subject to a plural and unstable legal framework, central bank digital currencies seem well motivated to establish themselves permanently in the ecosystem.
Governments are looking to regulate the market with their national digital currencies, and financial institutions are looking to get their share of the pie in this monetary paradigm shift. More recently, in Australia, the government has collaborated with Western giant Mastercard, wanting to multiply its involvement in the Web3 realm.
Their pilot project is supported by the Reserve Bank of Australia (RBA) and the Digital Finance Cooperative Research Centre (DFCRC) with the ambition of becoming the missing key for unaware investors to the crypto-currency ecosystem, fronting the gateway between these two worlds, with the use of supposed “reputable and reliable forms of money” provided by Mastercard itself.
Their ambitious solution enables the tokenization of CBDC (token being wrapped, i.e. the transfer of ownership of the collateral only without moving the assets in the underlying registers.) while allowing it “to interoperate with different blockchains and be leveraged by authorized parties in a safe and secure way”.
Such a gateway would meet the demands of consumers and small businesses, who are increasingly keen to "participate in trading on multiple blockchains, including public blockchains".
An important consideration in the analysis is that, like in Russia or China, CBDCs could still be used to track and monitor all financial transactions, giving governments unprecedented control over the population, being used to discriminate against certain groups of citizens by restricting them access to their financial services, even though we all know that money is never fully anonymous.
However, mobile and electronic wallet users have grown more rapidly in the last decade than those with conventional banking accounts. The financial services sector is heading towards banking as a service and embedded finance, which complement bank products and allow for higher value creation at a lower cost. These developments will impact the entire ecosystem, and CBDCs will play a crucial role in this transformation by fostering innovation at a fundamental rather than disruptive level.
Source: mastercard.com
Blockchain Comes to the Collateral Market with JPMorgan's New Network
This week is about Institutional tokenization with JP Morgan launch of its official Tokenized Collateral Network. In partnership with the giant BlackRock, the Onyx subsidiary is launching a new technology for secure asset transfers, including collateral settlements, operating with wrapped tokens through a private blockchain. Their aim is to considerably reduce operational friction within the market.
According to J.P. Morgan, The TCN allows institutions to tokenize assets and use them outside of any market working hours, under both title transfer and pledge arrangements. This has the potential to fundamentally alter the collateral market.
In a recent demonstration, the TCN was used to facilitate a transaction of money market fund (MMF) shares between JPMorgan and Barclays Bank. The transaction was completed faster, safer, and more efficiently than it would have been using traditional methods.
What looks like an innovation is actually not the bank's first attempt in term of blockchain technology.
As a matter of fact, it recently collaborated with the largest bank in the United Arab Emirates, First Abu Dhabi Bank (FAB) for blockchain-based cross-border payments. these features have enabled JP Morgan to process more than $300 billion since last June.
Other major financial institutions are also investing heavily in blockchain and digital assets. In November, Goldman Sachs launched its own platform for digital assets, which allows customers to issue financial instruments in the form of digital assets across a range of sectors, including real estate. Last year, Goldman Sachs also helped the European Investment Bank issue a digital bond using blockchain technology.
Asset managers are also experimenting with blockchain technology to find new ways to handle transactions for their assets. For example, Franklin Templeton is using blockchain to develop a new platform for the trading of private assets.
The bank's directors seem determined to enter the Web 3 era, and it would be no surprise to see more of them collaborating with official institutions such as Mastercard and the Australian Reserve Bank.
Source: jpmorgan.com
