There were several developments in the crypto capital markets space this week. ICE Futures U.S. Inc. announced it will list the Bakkt Bitcoin (USD) Daily Futures Contract on Dec. 12, 2018. This physical-settled futures contract calls for delivery of one bitcoin and will trade in U.S. dollars.
Coinbase now offers its customers the ability to trade the USD Coin stablecoin, which is pegged to the U.S. dollar on the Ethereum blockchain. The coins are collateralized by corresponding greenbacks. In similar news, Novatti Group, an Australian online payments processor, will issue a stablecoin tied to the Aussie dollar, with 1:1 fiat currency being held in trust.
The New York State Department of Financial Services, the state's financial regulatory agency, recently announced its approval of Coinbase Custody Trust Company LLC, a Coinbase Global subsidiary. Coinbase Trust will be licensed to offer custody services for bitcoin, bitcoin cash, ether, litecoin and other virtual currencies. G4S also announced a new, high-security, offline storage for protecting virtual assets. Citing an estimate that more than $1.2 billion in cryptocurrency has been stolen since 2017, G4S believes its offline storage is superior, with assets fragmented and distributed across various vaults. And a major investment bank is investing $15 million in cryptocurrency custodian BitGo Holdings Inc. to offer a secure way to hold its clients' digital assets. BitGo raised $57.5 million in this round of fundraising, but the endorsement by a household banking name may mean even more.
Ernst & Young has released a study about the ICOs that debuted in 2017, and the results are not inspiring: 86 percent of coins are below their listing price, with 30 percent now virtually worthless. Ninety-nine percent of the net gain was concentrated in 10 offerings, the majority of which involved blockchain infrastructure ventures. E&Y compared the current environment with the dot-com bust.
In Bermuda, fintech company Uulala has become the first applicant under the country's new regulatory regime to receive approval for an ICO. The company is seeking to raise $50 million from its offering, which will support its platform of blockchain-enabled financial services being made available to underserved communities in Latin America. Also offshore, Swiss financial services provider Swissquote is claiming to be the first bank to offer purchase and custodial services for ICO participants. This announcement comes on the heels of Russia's largest majority state-owned bank confirming it had completed a mock ICO as part of its regulatory sandbox test run.
To read more about the topics covered in this week's post, see the following:
- BAKKT" BITCOIN (USD) DAILY FUTURES CONTRACT TO BEGIN TRADING ON DECEMBER 12, 2018
- Coinbase and Circle announce the launch of USDC — a Digital Dollar
- New Stablecoin Tied to Australian Dollar Is Launching on Stellar's Blockchain
- DFS AUTHORIZES COINBASE GLOBAL, INC. TO FORM COINBASE CUSTODY TRUST COMPANY LLC
- G4S: CRYPTOCURRENCY: SECURE VAULT STORAGE IN THE WILD WEST
- Goldman Wades Deeper in Crypto, Betting on BitGo With Billionaire Mike Novogratz
- EY: Initial Coin Offerings (ICOs): The Class of 2017— one year later
- Ernst & Young Report: One Year on, ICOs' Fate Is 'Worse Than We Thought'
- Bermuda: Uulala first company to win ICO approval
- Online Bank Swissquote Enters ICO Market With Purchase and Custody Option for Clients
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.