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Coin Geek
a day ago
- Business
- Coin Geek
Tokenized bonds have tighter spreads—what does it mean?
Getting your Trinity Audio player ready... When the Bank for International Settlements (BIS) speaks, the financial world listens. Earlier in July, the BIS released a report detailing its findings on tokenized government bonds. It found that, while only $8 billion in such bonds had been issued to date, they had tighter bid-ask spreads than conventional ones. Even in these early stages, tokenization is delivering on its potential for greater efficiency in the financial system. However, the implications are far greater than increased efficiency in the bond market. Let's drill down and discover why. Why tokenized bonds have tighter spreads When it comes to bonds and other financial instruments, the spread is the difference between the bid and ask price. Typically, wider spreads mean less liquidity, higher transaction costs, and greater uncertainty. By default, tighter spreads mean the opposite. Tighter spreads are an objectively good thing from the perspective of market participants, but why would tokenized bonds lead to them? There are a few reasons: Instant settlement – Tokenized bonds on scalable blockchains settle faster. On blockchains like BSV, they can do so in near real-time. This reduces counterparty risk and the amount of time capital must be tied up to facilitate a trade. Tokenization eliminates multiple intermediaries, so it reduces both the time and costs involved in trades. Greater transparency – Scalable public blockchains allow for all trades to be executed and settled on-chain. This means every trade leaves time-stamped, immutable records. These records enable the automation of audits and compliance checks while reducing costs. Automated execution – Audits and compliance checks aren't the only things that can be automated. Coupon payments and reconciliation can also be executed via smart contracts, again reducing overheads and offering transparency that builds market confidence. Increased accessibility – Increased access to markets drives demand which in turn improves price discovery and liquidity. Tokenization opens the door to a broader range of investors, including institutions, fintechs, and even individuals. While these are all different functions, they all lead to the same thing—greater efficiency, reduced costs, and thus tighter spreads. The tokenization of everything is coming Eventually, everything will be tokenized, and the benefits will be realized across all industries. The financial industry will benefit from tokenized bonds, stocks, currencies, and contracts, but so will supply chains, manufacturing, insurance, and many others. The benefits will be the same for all—greater efficiency, transparency, and inevitably lower costs. How big can this get? McKinsey analysts estimate that as much as $1.9 trillion in value will be tokenized by 2030. This doesn't stop at paper or electronic assets; real-world assets (RWAs) like gold bars and oil barrels are also being tokenized on digital ledgers. However, for tokenization to reach its full potential, the world must come to a larger realization: everything will live on one scalable ledger. Blockchain will go the same way as the Internet In the early days of the Internet, there were many different networks: X.25, DECnet, BITNET, AppleTalk, and others. Eventually, they all hit their limitations, and the world realized that TCP/IP was the protocol to build on for an open, global network. Blockchain technology is still in its early days, but it will evolve in the same way the Internet did. Ethereum, Solana, Cardano, Binance Chain, and the others are just like these early Internet networks. Right now, they're hot, and big corporations and institutions are testing them. However, slowly, some are beginning to realize their limits. In March, a report co-authored by the European Central Bank's (ECB) Director General for Market Infrastructure and Payments, Ulrich Bindseil, highlighted how permissioned blockchains are complex and public blockchains are the better option. This is a clear signal that some players within large institutions are already beginning to see the bigger picture. While many believe in a multi-chain world with various chains communicating via solutions like Chainlink or dozens of different layer two solutions settling on Ethereum, the reality is that there will only be one global chain with every transaction happening on the base layer. Why? For the same reason, at the heart of the BIS report on tokenized bond spreads is efficiency. The costs of running nodes for and operating across multiple blockchains are prohibitive, the security vulnerabilities introduced by bridges and rollups are now well understood, and the benefits of time-stamping are lost when multiple blockchains keep different records. The most scalable, low-fee blockchain will win Naturally, the tokenization of everything will require legal and regulatory compliance. In the real world, business and commerce cannot be conducted without considering the law. Yet, if multiple blockchains say different things, which one wins in a dispute? It makes no sense to have many different blockchains. When the world catches up to this reality, it will settle on the most scalable, cost-efficient blockchain that enables them to easily comply with the laws they must abide by. There's only one blockchain that fits the bill—the original Bitcoin protocol—BSV. Already scaling to one million transactions per second (TPS) with fees of fractions of a penny, and with full smart contract capability, BSV has no competition when it comes to legally compliant, enterprise-grade blockchains. Furthermore, the most scalable blockchain has a hidden edge. Every conceivable use case for blockchains, will make building on BSV the rational choice for governments, institutions, and enterprises. Watch: Tim Draper talks tokenization with Kurt Wuckert Jr. title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen="">
Yahoo
2 days ago
- Business
- Yahoo
Why Tether's US entry poses challenge for Circle and itself
A version of this story appeared in The Guidance newsletter on July 28. Sign up here. Step aside banks. Here comes Tether. In the runup to passage of the Genius Act, lenders such as Bank of America and Citigroup sparked a lot of buzz with their plans to develop stablecoins now that a regulatory regime was set. Yet while the banks will play a key role, Tether was always going to be the force multiplier when it came to dollar-pegged cryptocurrencies in the US. If only it would deign to enter the world's biggest economy. Well, now comes word that it is doing just that. Wholesale strategy Last week, Bloomberg News reported that the issuer of the USDT stablecoin plans to go live in the US as early as the end of the year. But here's the twist: CEO Paolo Ardoino said Tether plans to launch a new dollar-backed stablecoin and focus on institutional payments and interbank settlements. The wholesale strategy is important because it means that Tether aspires to play a key role at the heart of the US financial system. Given the company's dominance — USDT accounts for 61% of the $266 billion market capitalisation in stablecoins — you can bet big banks and other institutions will take its offerings seriously. Still,Tether must comply with the bevy of requirements coming online thanks to the Genius Act. Stablecoin issuers will not only have to register and be approved by the Office of the Comptroller of the Currency, but they will also have to produce audited financial statements disclosing the reserves supporting their cryptocurrencies. Finding an auditor Tether has shunned playing ball with officialdom. It elected to stay out of the European Union after it ushered in the Markets in Cryptoassets Regulation, or MiCA, in 2023. Moreover, Tether must find an auditor for its books. At the moment, Tether relies on 'attestations' to disclose its reserves, which don't have the credibility of regulated audits conducted for public companies. Ardoino told DL News last year he was keen on signing up one of the Big Four accounting firms, but they had balked out of fear having Tether as a client would damage their reputations. Chances are the august institutions Tether plans to court for its new US stablecoin will frown on such unorthodox practices. This may change now that the Genius Act establishes a level playing field in the US. Plus, it doesn't hurt that US Commerce Secretary Howard Lutnick's former firm was a Tether partner. The other drama that will unfold is Tether's rivalry with Circle. Under CEO Jeremy Allaire, New York-based Circle did comply with MiCA and US regulations long before the Genius Act became law. Circle surges The strategy paid off big time on June 5 when Circle executed its IPO. Since then, its shares have skyrocketed 522% from its offering price in a performance that evoked the giddy heights of the dotcom era in the late 1990s. It's little wonder that Tether wants a slice. But fulfilling its ambition to become a cog in the US financial system is a big ask for a company uncomfortable with compliance. Just because the Trump administration is going easy on an industry where the president himself is a player doesn't mean Tether's would-be clients will follow suit. Edward Robinson is the story editor for DL News. Contact the author at ed@ Sign in to access your portfolio
Bloomberg
2 days ago
- Business
- Bloomberg
Wall Street Is Rewriting the Rules of Bitcoin Trading
Wall Street is seizing control of Bitcoin's center of gravity. Once ruled by offshore venues and retail-driven fervor, the world's largest cryptocurrency is now increasingly priced and steered from within the US financial system.
Arab News
6 days ago
- Business
- Arab News
Egypt records 69.6% YoY rise in remittances
RIYADH: Remittances from Egyptians working abroad rose by 69.6 percent year on year between July and May of the 2024-25 fiscal period, reaching a record $32.8 billion, new figures showed. Data released by the country's central bank show that remittances in May increased 24.2 percent annually to reach about $3.4 billion, representing the highest level of inflows ever recorded in the fifth month of the year, according to a statement. The sharp increase underscores growing confidence among expatriates in the country's financial system and reflects a broader improvement in Egypt's external economic position. This improvement is also linked to recent measures to stabilize the exchange rate and promote formal remittance channels. These policies have contributed to Egypt's net international reserves rising to $48.5 billion at the end of May, up from $47.8 billion in March. In a statement, the central bank noted: 'Likewise, remittances increased during the period January/May 2025 by 59 percent YoY to record around $15.8 billion (compared to about $9.9 billion).' The rebound in remittance flows comes amid broader economic reforms pursued under an International Monetary Fund-backed stabilization program. These reforms have bolstered Egypt's foreign currency position and helped attract more international capital. In May, Prime Minister Mostafa Madbouly announced that Egypt recorded real gross domestic product growth of 3.9 percent during the first half of the fiscal year. Private sector investment surged by 80 percent, while foreign direct investment rose by around 17 percent. Inflation, however, remains a key challenge. The annual urban headline inflation rate accelerated to 16.8 percent in May, up from 13.9 percent in the previous month, mainly driven by continued pressure on non-food prices. These inflation trends come as Egypt's broader economic landscape continues to be shaped by both domestic and global pressures. The government is navigating a delicate recovery amid external shocks, ongoing structural reforms, and efforts to manage public debt. In February, Moody's affirmed Egypt's 'Caa1' long-term foreign and local currency ratings with a positive outlook, citing improved debt servicing capacity, higher reserves, and falling borrowing costs. The ratings agency noted that recent currency devaluation and flotation helped boost foreign exchange reserves and reduce debt vulnerabilities. While a 'Caa1' rating denotes high credit risk, the positive outlook reflects the government's efforts to control inflation and stabilize interest rates. Egypt's credit rating is much lower than that of its Middle East and North African neighbors, such as Saudi Arabia, which was ranked Aa3 with a stable outlook in November, and the UAE, which was rated Aa2 in the same month.
Yahoo
6 days ago
- Business
- Yahoo
Asia Morning Briefing: Animoca Exec Says U.S. Heat Is Pushing China's Stablecoin Agenda
Good Morning, Asia. Here's what's making news in the markets: Welcome to Asia Morning Briefing, a daily summary of top stories during U.S. hours and an overview of market moves and analysis. For a detailed overview of U.S. markets, see CoinDesk's Crypto Daybook Americas. In 2021, China's central bank warned that global stablecoins could bring risks and challenges to the "international monetary system, payment and clearing system, monetary policies, [and] cross-border capital flow management." That quote, from the People's Bank of China's white paper on its e-CNY project, reflected the PBOC's deep skepticism toward private-sector digital currencies, particularly Facebook's Libra. As it turns out, Libra never launched. But stablecoins like Tether's USDT and Circle's USDC are now deep inside the financial plumbing around the world, especially in Asia, making processes like supply-chain financing more efficient than ever. As a result, Beijing's caution on stablecoins is giving way to a sense of urgency. They're on the agenda because they are seen as just another way the U.S. dollar is cementing itself in Asia's financial pipework, and that's not something the Chinese authorities are happy with. Animoca Group President Evan Ayuang said in an interview with CoinDesk that China's interest in stablecoins has been accelerating. It's been that way for a while, but now it's only increasing as they go mainstream on Wall Street. 'Right now, stablecoins are making a comeback for policymakers and interested issuers. The question is why?' he told CoinDesk. 'It really has to do with the Trump presidency … all the signals that the U.S. is coming out and giving out, they're actually pressuring China to act a lot faster.' Animoca is a Hong Kong-based Web3 fund that has its hands in all things crypto. The pressure point, he argues, is the recently enacted GENIUS Act which, for the first time, provides U.S. federal regulatory clarity on fiat-backed stablecoins and cements their role in the global financial system. Effectively, it could be seen as a digital extension of dollar hegemony, one that China can't afford to ignore. Animoca has its own stablecoin interests. It's part of a consortium that includes Standard Chartered Bank and Hong Kong Telecom working on a Hong Kong dollar (HKD)-denominated stablecoin. 'When China looks at the GENIUS Act, the way they look at it is that the U.S. is going after the space,' Auyang said. 'And if [the] dollar right now is the dominant reserve currency … it's always about these regular stablecoins that flow in the financial system to settle currency in light of trade tensions and direct bilateral trade deals. That matters.' There's a clear contrast from the tone of the PBOC's 2021 white paper, which portrayed stablecoins as destabilizing and speculative, lumping them alongside volatile cryptocurrencies. But, as Auyang noted, the conversation has shifted. Beijing now sees the need to compete on blockchain rails, particularly through regulated, offshore yuan (CNH) stablecoins, which could help make the country's currency — the reminbi (RMB), or, colloquially, the yuan — a more practical choice for offshore settlement. 'If you are trying to make RMB more internationalized, but in a controlled way, this is it. The offshore CNH is it,' Auyang said. 'That stablecoin is the way to internationalize it that allows you to have the currency control still in place, but allows you to have offshore.' A regulated stablecoin, be it HKD or CNH, can be connected to onshore Chinese assets that could be put onto public blockchains, thereby creating new and important financial rails for the country. While e-CNY use cases have typically revolved around central banks and institutions. The HKD or CNH stablecoin, issued in Hong Kong or through public blockchain infrastructure, offers a vehicle for internationalizing the currency while still respecting Beijing's capital controlss. Another option could be liquidity pools in Hong Kong that provide places for HKD, CNH, and e-CNY transactions to settle. Of course, he said, Beijing has its eye on HKD stablecoins as the City, with its autonomous legal framework, is China's sandbox. 'At some point in time, it's going to be the stablecoin,' he said, predicting that even international business-to-business payments will favor tokenized fiat over permissioned central bank digital currencies (CBDCs). And this shift isn't limited to China. 'Everybody's going to do this after the U.S. passes the GENIUS Act. Every country is going to think about this. Every country will have a regulated stablecoin at some point in time,' he said. This isn't about overthrowing the dollar, which is an impossible task considering the liquidity it has. 'When I'm trading with my partners in Southeast Asia, there is deep enough liquidity out there in non-USD stablecoin pairs for that trade to happen,' he said. The PBOC's 2021 white paper framed stablecoins as threats. Four years later, Beijing seems to be warming up to the idea that they have a role to play in the financial order of the future. Market Movements BTC: Bitcoin is consolidating around $118,000 after last week's $123,000 all-time high, with analysts warning of a potential dip to $115,000 amid fragile sentiment, profit-taking, and minor bearish signals, though onchain data suggests the uptrend could soon resume. ETH: ETH remains in a strong uptrend above key moving averages, trading at $3,619 after a rally that pushed prices near $3,800, with $3,300 now acting as key support to maintain the bullish structure. Gold: Gold prices fell 0.6% to $3,410.26 on Wednesday as a US-Japan trade deal eased trade war fears and dampened safe haven demand, though longer-term support remains from de-dollarization and central bank buying. Nikkei 225: The Nikkei 225 rose 1.09% on Thursday, extending gains as optimism over trade deals with the U.S. and potential progress with the EU lifted Asia-Pacific markets.S&P 500: U.S. stocks rose solidly on Wednesday—driven by optimism over the U.S.-Japan trade deal—with the Dow up over 1%, the S&P 500 gaining more than 0.75%, and the Nasdaq adding around 0.6%. Elsewhere in Crypto: Tether CEO: US market entry 'well underway' amid plans for institutional stablecoin (The Block) Some Tokenization Is Just 'Gambling', Says Prometheum Co-CEO (Decrypt) The Market Has Become 'Overly Excited' for Stablecoins, Hong Kong Financial Regulator Says (CoinDesk)Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
