Appold Market Watch - Week 11 to 15 December 2023
Market Update & Industry News - Week ending 15 December 2023
🔷 International blockchain wholesale payments solution, Fnality International reported the world’s first live transaction that digitally represented funds held at a central bank. Fnality, along with its shareholders UBS, Santander and Lloyds Banking Group successfully made a live payment in sterling using an “Omnibus Account” at the Bank of England. Fnality raised $95m in a funding round led by Goldman Sachs and multiple global banks such as Barclays last month.
Appold view: With 20 major institutions as shareholders, we expect to see a rapid expansion of this across multiple products and currencies with involvement from most of those institutions.
🔷 The investment arm of Deutsche Bank, DWS Group announced a new partnership with Galaxy and Flow Traders to launch a euro-denominated stablecoin. The new venture, AllUnity will be approved and then regulated by the German Federal Financial Supervisory Authority (BaFin) and is allegedly set to launch in 12 to 18 months post-BaFin approval.
Appold view: A positive move from DWS Group as it looks to expand its digital asset strategy and be a leading force in stablecoins and tokenisation. Lots of red tape to get through for a traditional and conservative organisation, but great potential which will sharpen up the competition.
🔷 The US announced new accounting rules allowing digital asset holdings to be measured at fair value under new Financial Accounting Standards Board (FASB) rules to be implemented in 2025. This will allow the most up-to-date value to be recorded, as opposed to the current rules of only recording the lowest value.
Appold view: The outgoing rules made little sense for company valuations in terms of digital asset holdings in their treasury. This will have a significant impact on companies, such as Microstrategies, who hold large positions and will now be able to show the company's real value, as well as capture the price volatility of the assets.
🔷 Deutsche Bank-backed Swiss crypto custody firm, Taurus SA announced a partnership with a Zurich-based fintech lending platform to tokenise German SME loans. Taurus and Teylor AG will tokenise debt, which can be admitted for secondary market trading on Taurus’ TDX Marketplace. The tokenised debt product is alleged to receive institutional investment within the next two weeks.
Appold view: There is increasing competition in this space and a lot of issuer interest. The challenge remains in generating interest for strong secondary market liquidity, particularly where market makers don’t exist for such bespoke products.
