Politics / United Arab Emirates
Policy and political decisions with potential market and society impact. Topic: United-Arab-Emirates. Updated briefs and structured summaries from curated sources.
Tokenizing US Treasuries With Don Wilson
Full timeline
0.0–300.0
The adoption of Canton Blockchain for asset settlement by the DTCC will facilitate faster on-chain transactions, leading to significant cost savings in financial intermediation.
- Cathie Wood interviews Don Wilson of DRW Holdings in Cumberland DRW Holdings
- Cumberland DRW Holdings was an early entrant into crypto and helped build Canton Blockchain
- Canton Blockchain is an institutional blockchain for asset settlement
- Discussion on faster on-chain settlement and collateral mobility
- Debate on whether minor extractable value is the same as payment for order flow
- Depository Trust & Clearing Corporation announced they are using Canton Blockchain as their settlement layer for tokenizing treasuries
- By 2035, 5 percent of global financial value is expected to be tokenized
- Tokenization could lead to significant savings in financial intermediary fees
- Tokenized assets can be more useful and allow for 24/7 access to capital
300.0–600.0
The launch of the Canton network aims to enhance the efficiency of value movement in traditional financial markets, potentially revolutionizing market infrastructure.
- Don Wilson is the founder and CEO of DRW Holdings, a proprietary trading firm
- DRW Holdings started Cumberland DRW Holdings, its crypto arm, in 2014
- In 2015, DRW Holdings was the first public asset manager to gain exposure to Bitcoin through GBTC
- Don Wilson and Kathy have known each other since 2015
- Digital asset holdings were started to leverage technology for traditional financial markets
- The Canton network is a public permissionless chain designed for traditional financial markets
- Canton is described as a network of networks for institutions
- The goal is to enable the movement of value in a more efficient and rapid manner
- Configurable privacy on the chain is considered important for moving value
600.0–900.0
The decentralized permissionless chain with over 600 validators enhances transaction privacy, reducing material slippage in execution for institutions embracing technology.
- Institutions want to embrace technology while ensuring privacy in transactions
- Leaking information about stock ownership can lead to material slippage in execution
- There is a need for configurable permissioning depending on the asset
- The network is a permissionless chain with over 600 validators and 32 super validators
- Canton is not widely known in the crypto community, but is well regarded by DRW and digital assets
- DTCC chose Canton to tokenize a subset of US treasuries held at DTC
- DTCC is the depository trust clearing corporation holding about $100 trillion of assets
900.0–1200.0
The Depository Trust & Clearing Corporation is transitioning to tokenize treasuries on the Canton Network, enhancing ownership tracking and liquidity for market participants.
- Depository Trust & Clearing Corporation announced it will tokenize some of the most liquid treasuries on Canton Network
- Ownership of treasuries can be tracked on the Canton Network network instead of Depository Trust & Clearing Corporations database
- The transition from share certificates to a database was facilitated by Depository Trust & Clearing Corporation for equities
- Transfer agents sit between companies and the Depository Trust & Clearing Corporation for managing securities
- Equities can be held in street name to allow for borrowing and trading
- Depository Trust & Clearing Corporation tracks shares that are readily bought, sold, or borrowed against
- Preliminary trades with treasuries have already been conducted on the Canton Network network
1200.0–1500.0
The Depository Trust & Clearing Corporation (DTCC) is expected to transition a majority of its $100 million in assets on-chain within five years, enhancing market liquidity and operational efficiency.
- Most markets are expected to operate 24-7 or 24-5
- Collateral mobility is important for switching between cash and crypto
- USTC was used as the on-ramp offering in this case
- There may be a proliferation of stablecoins as switching between them becomes easier
- Depository Trust & Clearing Corporation holds $100,000,000 of assets, with a majority expected to move on-chain in the next five years
- Depository Trust & Clearing Corporation is connecting to other networks and will decide which networks to connect to
- Canton Blockchain is positioned as a public permissionless chain with configurable privacy and permissioning
- Depository Trust & Clearing Corporation has joined the Canton Blockchain Foundation as co-chair with Euroclear Bank
1500.0–1800.0
Canton is positioned to become the default institutional RWA network, enabling borrowing against equity at market-reflective rates, which could transform market dynamics.
- Depository Trust & Clearing Corporation believes that Canton could become the default institutional RWA real world asset network
- Criticism of tokenization includes it being seen as just wrapping the same assets with more buzzwords
- Tokenized assets on Canton allow for borrowing against equity with rates reflecting market demand
- Prediction markets are shifting from retail to institutional market making
- Some prediction markets are similar to traditional trading practices
- Many prediction markets operate with transparent positions and trades
- Large institutions may not want to broadcast their trades in prediction markets
1800.0–2100.0
Canton Network aims to transition from a private permission chain to a public permissionless chain, appealing to institutions seeking decentralized solutions to avoid transaction censorship.
- Canton Networks main competition includes public chains like Ethereum and Solana
- Canton Network started as a private permission chain but aims to transition to a public permissionless chain
- Private permission chains are viewed as silos and not long-term solutions
- Large institutions prefer decentralized chains to avoid transaction censorship
- ARC Blockchain focuses on cross-border money movement but faces privacy concerns
- Transparency in transactions can lead to market reactions, as seen with stablecoins in Mexico
- R3 Corda was an unsuccessful attempt by banks to create a blockchain solution
2100.0–2400.0
Digital Asset raised strategic capital to scale Canton, aiming to establish it as the primary chain for global collateral movement and security settlement.
- Digital asset raised strategic capital from The Bank of New York, NASDAQ, S&P Global, I Capital and others
- The goal is to make Canton the go-to chain for global collateral movement and security settlement
- The Bank of New York is the primary custodian for United States treasuries
- S&P is a major index provider with opportunities around more efficient ETF creation using tokenized equities
- I Capital has tokenized their funds on the Canton chain
- Private equity and private credit are growing rapidly with projects already on Canton
- The SEC is trying to democratize access to private equity for retail investors
2400.0–2700.0
Canton's decentralized blockchain allows global participation, attracting interest from the UAE for public blockchain use cases, enhancing competitive advantages in rapid experimentation.
- Canton is already decentralized, allowing anyone to connect and interact with the chain
- To become a super validator, one must petition the foundation
- The foundation is onshore, which is unusual for such entities
- The networks decentralization makes it comfortable for global participants to interact
- The United Arab Emirates has shown interest in using Solana Labs for public blockchains
- There are multiple use cases being developed across various chains in the United Arab Emirates
- The ability to rapidly deploy and experiment with new ideas is a significant advantage in the crypto space
- The US has a competitive advantage with a fail fast attitude in regulated markets
2700.0–3000.0
MEV allows traders to exploit order queues, leading to potential market manipulation and inefficiencies. This raises concerns about the integrity of trading practices in the crypto market.
- MEV enables people to jump in front of other orders or pay to be ahead of the queue
- Payment for order flow involves paying for order execution, while MEV is more akin to front running
- Front running is illegal, whereas payment for order flow is not
- MEV involves stepping in front of a seller order to take the other side of a trade
- If all orders were routed to a lit order book, it would create a better trading environment
- There is concern about the four-year cycle in the crypto world
- The flash crash on 1010 could have been a trigger for market changes
- The rally in Bitcoin was driven by a proliferation of debts
3000.0–3300.0
Debts trading at a discount to MNAV creates market overhang, while institutional buying during sell-offs stabilizes Bitcoin prices.
- Debts started trading at a discount to MNAV, creating an overhang on the market
- October 10th highlighted weaknesses in the crypto market structure
- There are signs of institutions buying during the sell-off, preventing a steeper correction
- The sell-off is seen as Bitcoin moving from weak hands to strong hands
- Michael Saylors average cost is around $74,000, which may attract buying activity
- Concerns exist that MicroStrategy trading at a discount to MNAV could exacerbate the sell-off
- On-chain analytics suggest stronger hands are moving into the market