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Although the collective value of all crypto markets is only a tad above its year-to-date low, institutions still seem poised to tackle digital assets head on, with an array of Wall Street giants making meaningful moves throughout the past week.
BitGo Receives U.S. Regulatory Approval To Launch Custody Solution
On Thursday, CNBC divulged that BitGo, a well-known American cryptocurrency infrastructure provider, had received a regulatory green light from South Dakota’s Division of Banking to make a foray into offering custodial solutions for institutions. More specifically, the startup collected a state trust company charter from the aforementioned governmental body, which reportedly makes its crypto custody solution the first that is fully regulated.
Following this development, Mike Belshe, the CEO of BitGo, sat down with CNBC’s Fast Money panel to discuss his firm’s newest product and the current institutional climate surrounding the cryptocurrency industry. Belshe first pointed out that institutions are interested in this space, which shows “real promise,” without a doubt, adding that interest from the aforementioned subset of firms will only “continue to grow.”
Closing off the segment, Brian Kelly, referencing the knowledge he gained as the CEO of the crypto-centric BKCM, noted that this may just be the product that institutional investors have been waiting for and that BitGo’s custodial solution is making him “much more optimistic.”
Morgan Stanley To Offer Bitcoin Swaps
As reported by NewsBTC on Thursday, insiders revealed that Morgan Stanley, one of the leading firms on Wall Street, has already developed the infrastructure that would be required to back Bitcoin derivatives. As such, it was relayed by Bloomberg that the firm reportedly has plans to launch a Bitcoin swaps vehicle on the condition that established institutions show sufficient interest and demand. Additionally, the firm is said to be going through an internal approval process to verify that the aforementioned swaps are ready to hit the streets, Wall Street if you may.
It is important to note, however, that Morgan Stanley doesn’t intend to directly trade Bitcoin, as its new vehicle will be tied to the futures market, instead of physical crypto assets. As such, this new product will allow interested investors to experience the full performance of Bitcoin, both long and short, while not holding the BTC themselves.
While some diehard decentralists see this product as a slap to the face of decentralization itself, many see this as a move that brings much-needed legitimacy to a space that is often misconstrued by those who do not understand it.
Citigroup To Reportedly Launch “Digital Asset Receipt”
In a move that indicates that the institutional dominos are beginning to cascade, Citigroup, a multinational financial services provider, has been said to have created a product known as the “Digital Asset Receipt,” reports Business Insider. The DAR, as it has been dubbed, seemingly resembles an American depository receipt, a lesser-known, yet well-established investment vehicle that allows American investors to own foreign stocks that don’t trade on U.S.-based exchanges.
In the context of cryptocurrencies, the crypto assets allocated to DARs will be held by a custodian, while the Depository Trust & Clearing Corp, a Wall Street clearing and settlement service, will provide an extra layer of trust and verification for individuals that invested capital to this newfangled vehicle. Like the aforementioned Morgan Stanley swap product, those who own the receipt will receive the full exposure of Bitcoin’s often-drastic price fluctuations, without actually having to worry about holding the digital asset.
Those familiar with the matter pointed out that although the idea has been fleshed out, it is still unclear when DARs could hit the public limelight.
Coinbase, PolyChain, And Others Create Lobbying Group
In an unexpected revelation, Coinbase, along with PolyChain Capital, Circle, and other U.S.-based crypto-focused startups, revealed that they had joined hands to create the so-called “Blockchain Association.” As per a Medium post released by the recently-established consortium, the Blockchain Association is set to be a Washington-based “non-profit trade association” that will hopefully appeal to regulators based in America’s capital city.
More specifically, the group of these leading crypto innovators will be focused on providing a unified narrative to U.S. regulators in a bid to facilitate and foster the innovation, adoption, and maturation of blockchain technologies, and subsequently, some form of crypto assets. The post noted:
“Our objective is to create a pro-innovation environment for the industry, meeting the growing global demand for accessible, transparent and democratic financial and technical systems.”
To accomplish this seemingly ambitious plan, the group intends to incubate meaningful relationships between the cryptosphere and industry leaders, to educate regulators and the public about blockchain and cryptocurrencies, and most importantly, to advocate for policies that “enable innovation.”
Winklevoss Twins Launch “Gemini Dollar” Stablecoin
The Winklevoss twins, who have become well-known for their advocacy of the crypto industry, have just launched their own stablecoin, named the “Gemini Dollar” after the exchange the two own and operate. Per a previous NewsBTC report, the Gemini Dollar, built on top of the Ethereum network, will be a stablecoin that intends to accurately represent that value of a single U.S. dollar, like Tether, TrueUSD or any similar USD-focused crypto asset.
To accomplish this feat, U.S. dollars will be deposited in State Street, a U.S. bank, which will allow people to receive Gemini dollars, move them across the globe and then turn them back into cold, hard cash.
Due to the fact that the Winklevoss twins hold close ties to New York regulators, the recently-established Gemini Dollar has already received approval from the New York Department of Financial Services, making it the first stablecoin to receive a regulatory go-ahead from a financial-focused governmental body. With this move, the two innovators intend to bridge the gap between legacy markets and digital markets, or the crypto asset space to be more specific.
In spite of the undoubtedly positive set of news, the market barely budged. In fact, some would argue that the price action seen throughout the week was just the normal twists and turns of any early-stage market. But as put by Joseph Young, a NewsBTC editor and cryptocurrency analyst, “I can argue [that] this week has been the best week for crypto… It’s not always about the price.”
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