Ep. 7 - UBS' Tokenized Gold on ZKSync

The CFTC is planning a tokenized collateral pilot program to explore the use of stablecoins and other tokenized assets as margin for derivatives transactions. An advisory committee has already recommended the use of such collateral as it enables instant transfers to cover margin requirements. To this end, the CFTC is inviting CEOs of crypto companies to discuss implementation. Despite ongoing investigations into Crypto.com for controversial sports betting-like contracts, the company has also been invited. The aim is to improve efficiency and speed in the provision of collateral through tokenization.

Major Swiss bank UBS is testing blockchain technology by implementing its UBS Key4 Gold service, which enables fractional trading of physical gold, on the Ethereum layer-2 network zkSync. This proof-of-concept demonstrates the growing trend of traditional financial institutions to utilize blockchain for more efficient and secure transactions, especially with zero-knowledge proofs (ZKPs) to improve data protection. UBS is not alone; other major banks are also exploring blockchain applications. The successful test transaction points to a possible wider integration of layer 2 solutions into financial services. This move underscores the increasing convergence of traditional financial institutions and blockchain technologies.

Circle, the issuer of the USDC stablecoin, has acquired Hashnote, an issuer of tokenized real-world assets (RWAs). This acquisition, along with a partnership with Cumberland, aims to improve the integration of tokenized RWAs, specifically the US Yield Coin (USYC), with USDC and enable convertibility between cash and yield-bearing assets. The move underscores Circle's strategy to strengthen its position in the stablecoin market and capitalizes on the projected growth of the tokenized RWA market to over $600 billion by 2030. Financial details of the acquisition have not been disclosed.

This episode discesses PayPal USD (PYUSD), a new US dollar-backed stablecoin from PayPal. PYUSD can be bought, sold, held and transferred via the PayPal app and website, offers fee-free transfers to US PayPal friends and enables payments at millions of online merchants. The stablecoin is built on Ethereum and Solana and is programmable for developers. PayPal emphasizes transparency through regular reports on the collateral.

Sygnum, is a global digital asset bank based in Switzerland and Singapore. The company offers institutional investors a wide range of regulated digital asset services, including trading, custody, tokenization and asset management. A recently completed financing round earned Sygnum the status of a unicorn company (valuation over USD 1 billion). The focus is on growing the business, expanding the product portfolio (especially in the Bitcoin space) and further regulatory compliance. Sygnum emphasizes its bank-like security and expertise in blockchain technology.

A briefing about CW2 in RWA This Podcast covers: Several financial institutions and crypto companies are exploring or expanding their offerings in the tokenized real-world assets (RWAs) space. Coinbase is considering offering tokenized shares on its Base platform, while Bitfinex is moving its derivatives operations to El Salvador. BounceBit is partnering with Plume Network to expand its RWA offering. Plume Network is working with endl to provide companies with access to RWA returns. Something is also happening in traditional finance: OCBC has started selling customized tokenized bonds. E-Trade is considering entering crypto trading and Ethena is planning to launch iUSDe for traditional finance. HashKey is working with Asteroid to improve security and RWA tokenization. The DTCC plans to intensify its work with digital assets in 2025. IZNES has simulated the use of wCBDC with Banque de France, and Santander has conducted an intraday repo with JP Morgan on their blockchain infrastructure. These developments point to a growing trend of asset tokenization driven by regulatory clarity and institutional interest. Companies like SuperWine are even tokenizing wine, while Ripple is partnering with Chainlink to bolster its stablecoin RLUSD in DeFi markets. Multicoin Capital expects that 2025 will see a significant upswing in the tokenization of securities and that AI agents will play an important role in this area. The increased use of DLT and tokenization will lead to more transparency, efficiency and liquidity in the financial markets.

Multicoin Capital predicts a key inflection point for Web3 in 2025, driven by artificial intelligence and tokenization, which will lead to strong institutional adoption. The report expects the emergence of AI-powered companies without employees and rapid institutional adoption of security tokens. AI agents, so-called "alpha hunters", will play a key role in navigating the new tokens and financial products. Increasing institutional participation will be boosted by the success of Bitcoin ETFs and a pro-crypto government in the US. Finally, the development of autonomous AI agents will fundamentally change the digital economy.

Ethena plans to launch iUSDe in 2025, bridging crypto and traditional finance with high-yield savings for investors and institutions. In this episode we discuss Ethena's remarkable success in 2024 and comment their plans for 2025.