White Star Capital Digital Assets Fund - Newsletter #156
CBDCs Lay the Foundation for a New Monetary System
CBDCs lay the foundation for a new monetary system
White Star Capital Digital Asset Fund - newsletter #156
By Raphaël Wat
Central banks and authorities across the world are exploring the possibility of implementing Central Bank Digital Currencies (CBDC). A CBDC is a digital currency issued by a government, typically a tokenized version of the country's existing fiat currency. Central banks representing 67% of countries worldwide and 98% of the GDP are investigating CBDCs, with a third of them in advanced stages. The current research explores the emerging technologies that could support a CBDC payments infrastructure and their potential roles within the existing payment system. The focus is mainly on system architecture, including the maintenance, security, and verification of ledgers that record digital asset ownership and transactions. It also encompasses tokenization and custody models.
The benefits and risks of CBDCs depend on their design and issuance approach. However, CBDCs are expected to offer a more efficient and cost-effective system for both international and local payments. Moreover, they could lay the foundation for a new monetary system by improving the implementation of monetary policy and fostering financial inclusion.
Several cross-border CBDC trials are currently underway, but the "mBridge project" stands out for its progress, institutional engagement, and potential to disrupt the current system. Launched in 2021 by the Bank for International Settlements (BIS) and central banks of Hong Kong, China, Thailand, and the UAE, this joint venture aims to assess the viability of CBDCs for cross-border trade. The key aim is to streamline payments between commercial banks in different jurisdictions by connecting them to a network co-managed by their central banks.
Beyond the use case of cross-border trade, the project has collaborated with commercial banks, including major Chinese institutions, Goldman Sachs, HSBC, SocGen, and others. It has also worked with exchanges to test blockchain-based security issuance, multi-jurisdiction insurance payments, programmable trade finance, FX settlement, among other uses.
mBridge is set to become the first functioning blockchain-based payment platform involving official entities. Its core is based in Asia, but organizations from all continents are participating. Although it's unlikely to displace the dollar as the global reserve currency, it could influence international cash flows, trade agreements, and the effectiveness of sanctions.
The BIS recently reported that, in addition to the five main participants, numerous official entities have joined mBridge as observers to gain access to a "sandbox" for experimentation. These include the IMF, the World Bank, the European Central Bank, the U.S. Central Bank, and the central banks of 23 other countries. The mBridge project extends beyond several organizations experimenting with tokens and addresses. This initiative includes committees focused on addressing key issues such as legal frameworks, policy implications, governance, redemption terms, ownership rights, and AML compliance.
🔦 White Star & Portfolio Spotlight
ALEX Launchpad Beta Testing whitelist is here!
ALEX is unveiling their BRC20 launchpad with multichain capabilities.
Haruko announce integration with Crypto.com
This strategic partnership aligns Haruko's comprehensive digital asset infrastructure solutions with the robust liquidity and advanced technological framework of Crypto.com Exchange.
$17m worth of Aptos tokens deposited into Thala’s Liquid Staking derivative
This makes Thala Labs the 10th largest non EVM protocol.
🏦 Enterprises & Institutions
Coinbase introduces spot crypto trading for international institutions
Coinbase CEO Brian Armstrong previously emphasized that the exchange will continue to eye its international options due to the regulatory uncertainty.
FIFA drops NFTs that offer chance at World Cup final tickets, moves to Polygon
FIFA, the international governing body for the world's most popular sport, is dropping a limited number of digital collectibles later this week that will give holders the opportunity to watch the final game of the 2026 World Cup, according to a statement.
Nubank Cripto adds support for USDC, broadening access to the stablecoin in Brazil
Circle announced a partnership with fintech Nubank, aiming to give Brazilians greater access to buying and holding USDC stablecoins.
Robinhood launches crypto trading app in Europe
In its announcement today, Robinhood said its platform is the only one on the market that offers to repay a percentage of customers’ trading volume each month in bitcoin. Users can also earn referral bonuses in bitcoin.
Coinbase rolls out money transfers via links sent on WhatsApp, TikTok and Instagram
Coinbase announced customers can use its wallet to transfer money by sending links through messaging apps like WhatsApp, iMessage, and Telegram, in addition to social media platforms such as Facebook, Snapchat, TikTok and Instagram.
New LimeWire AI-powered music platform uses Polygon, Algorand
The LimeWire brand, once synonymous with file-sharing in the early 2000s, has morphed into an AI-powered content publishing platform.
⚖️ Government & Regulation
Turkey’s Banking Giants Go Big on Crypto as Legislation Looms
Turkey’s government is gearing up to introduce new legislation for the crypto sector. It’s still unclear how restrictive the new laws might be, but it hasn’t spooked adoption even at the institutional level.
FASB publishes new crypto rules that will let firms use fair-value accounting
The Financial Accounting Standards Board, a U.S. regulating body that sets general accounting practices, has published long-awaited standards it says will improve disclosure of certain crypto assets.
KuCoin settles with New York for $22 million and agrees to block users from state
New York Attorney General Letitia James had sued the digital asset exchange in March for violating the state's laws. The suit had named ether, along with other tokens, as unregistered securities that KuCoin had listed in the state.
BlackRock and Fidelity hash out details over spot bitcoin ETF redemption models with the SEC as anticipation mounts
At issue are three separate models to determine which entity would have to sell bitcoin if investors want to redeem shares for the underlying asset.
El Salvador offers 'Freedom Visa' for $1 million crypto investment
Limited to 1,000 participants per year, the Freedom Visa program aims to attract applicants seeking residency and citizenship via investment, similar to Golden Visa programs in other countries.
Crypto.com secures Electronic Money Institution license from UK financial regulator
The trading platform joins crypto firms such as Coinbase and Gemini in obtaining a UK EMI license, enabling it to broaden its product offering in the country.
SocGen’s crypto unit debuts euro-pegged stablecoin
The stablecoin marks the first time a regulated European bank has made a euro-pegged stablecoin available on a crypto exchange
💰 Funding & Exits
NodeKit closes $1.2 million pre-seed round to build Avalanche-based network for rollups
NodeKit, the team working on Avalanche-based network SEQ, has raised $1.2M in a pre-seed round led by Borderless Capital, with participation from the Avalanche Blizzard Fund, Polygon Ventures and Wormhole Cross-Chain Ecosystem Fund.
a16z and Founders Fund lead $13.5 million round for crypto onboarding startup Dynamic Labs
The funding round also included participation from Founders Fund, Castle Island Ventures, Breyer Capital, Nikil Viswanathan, and Joe Lau from Alchemy.
Asian messaging giant LINE raises $140 million to expand NFT venture
LINE NEXT plans to officially launch a global NFT platform called DOSI in January 2024, with fresh investment led by a Peter Thiel-backed private equity firm.
Bitcoin staking protocol Babylon raises $18 million in Series A funding
Babylon, a bitcoin staking protocol under development, has raised $18 million in a Series A funding round co-led by Polychain Capital and Hack VC.
Crypto data platform startup Shadow raises $9 million in Paradigm-led seed round
Using so-called “shadow forks,” Shadow provides private execution environments designed to mirror the state of a public blockchain in real time.
Curvance emerges from stealth with a $3.6 million seed round for DeFi 'everything app'
Curvance plans to use the funds to expand operations, support security audits and recruit top talent in the DeFi market.
FCA-Authorised Digital Asset Derivatives Venue GFO-X Raises $30m Series B Funding, Led by M&G Investments
The strategic investment will fund GFO-X through its forthcoming launch and support future innovation in the regulated digital asset sector, enhancing trust and credibility in the market.
Animoca Brands raises additional US$11.88 million in second tranche of funding for Mocaverse
Participants in this second tranche of funding for Mocaverse included Block1, OKX Ventures, Foresight Ventures, Polygon Ventures, Dapper Labs, and others.
Digital Asset Brokerage Firm Nonco Raises $10M Seed Funding Led by Valor Capital, Hack VC
The round was led by former U.S. Comptroller of Currency and CEO of Binance.US, Brian Brooks of Valor Capital Group and Hack VC, the investment firm led by former co-founder of Dragonfly Capital’s Alex Pack.
🚀 Project Launches & Updates
Galaxy, DWS and Flow Traders eye stablecoin launch on Ethereum, Solana
Firms set to seek regulatory approval for their planned Euro-denominated stablecoin before the intended launch date in 12 to 18 months.
Swarm launches permissionless trading platform for tokenized real-world assets
Regulated DeFi platform Swarm has launched “Open dOTC” — an alternative permissionless platform for trading tokenized real-world assets.
LayerZero says it's targeting token launch for first half of 2024
Blockchain interoperability protocol LayerZero has clarified it will launch a token after months of ardent speculation.
🔥 Other Bits We're Excited About
Safe joins forces with Sygnum Bank and Coincover to launch crypto recovery service
On-chain custody protocol Safe (formerly Gnosis Safe) has teamed up with digital asset banking group Sygnum and UK-regulated recovery service provider Coincover to launch an optional crypto recovery service for users.
Crypto-fueled wireless carrier Helium Mobile debuts unlimited nationwide plan in US
Helium Mobile’s service combines the peer-to-peer Helium Network, an internet-of-things project that uses the Solana blockchain, and a nationwide 5G network.