First Abu Dhabi Bank (FAB), the largest bank in the United Arab Emirates and one of the world’s leading financial institutions, has announced the successful conclusion of its pilot testing in collaboration with J.P. Morgan’s Coin Systems for blockchain-based cross-border payments. The Coin Systems, developed by J.P. Morgan, facilitate digital solutions on a proprietary blockchain network, enabling instant transfers and settlements of value within a permissioned distributed ledger. This pilot phase, executed seamlessly and meeting satisfactory response times, has underscored the capabilities and potential of blockchain technology in augmenting cross-border payment solutions. Looking forward, FAB’s Global Transaction Banking division is poised to explore further opportunities in tandem with J.P. Morgan’s Coin Systems, reinforcing their dedication to advancing the landscape of cross-border payments.
The blockchain-based collateral settlement application of JPMorgan Chase & Co., a global banking giant, the Tokenized Collateral Network (TCN), is now live, having completed its inaugural transaction involving two significant clients: BlackRock and Barclays. According to Bloomberg, the TCN allowed BlackRock to seamlessly convert shares from one of its money market funds into digital tokens. These tokens were then transferred to Barclays as collateral for an over-the-counter derivatives trade. Tyrone Lobban, head of Onyx Digital Assets at JPMorgan, confirmed this breakthrough, highlighting the efficiency gains. Previously tested internally in May 2022, TCN demonstrated its potential by transferring tokenized representations of shares from a BlackRock money market fund for collateral on JPMorgan's private blockchain platform, Onyx Digital Assets. Now live, TCN is poised for wider adoption, with a pipeline of clients and transactions in the works, according to Ed Bond, head of trading services at JPMorgan.
The Financial Conduct Authority (FCA) of the United Kingdom has placed restrictions on peer-to-peer lending platform Rebuildingsociety, the firm with which crypto exchange Binance partnered for compliance with the regulator’s marketing regime. In an Oct. 10 notice, the FCA said Rebuildingsociety was not authorized to “approve the content of any financial promotion for a Qualifying Cryptoasset for communication by an unauthorised person” and needed to withdraw any existing approvals. The notice suggested that Binance may no longer have a U.K. partner in compliance with the FCA’s marketing requirements, which went into effect on Oct. 8. The regulator warned Rebuildingsociety to notify any client — presumably including Binance — that it was “not permitted to approve the content of any Financial Promotion for a Qualifying Cryptoasset,” withdraw any ads offering to approve financial promotions and confirm its compliance to the FCA in writing. Binance aimed to use Rebuildingsociety to allow its U.K. users to view the exchange’s products and services through a localized domain, as the exchange is not registered with the FCA.
The owner of crypto exchange Bitfinex is exploring a $150 million share buyback that would provide it with greater control over the private company’s dealings, particularly as regulatory scrutiny on the industry heats up. iFinex Inc., the Hong Kong-based firm which shares directors with crypto’s largest stablecoin issuer Tether Holdings Ltd., wrote to shareholders on Sept. 22 with an offer of $10 per share for 15 million shares, according to a document seen by Bloomberg News. The deal, which represents around 9% of iFinex’s outstanding capital and values the business at $1.7 billion, would depend on the business receiving an influx of cash from at least one of its subsidiaries, the proposal said. The arrangement was offered to shareholders who bought iFinex stock as part of a 2016 swap arrangement with investment platform BnkToTheFuture. That year, around $71 million in Bitcoin was stolen from Bitfinex in a hack — a token pile now worth closer to $3.3 billion. Bitfinex offered to make users whole by providing them with BFX token.
Bitcoin’s Layer 2 Lightning Network has witnessed a 1,212% growth in just two years. In August 2023, the network recorded approximately 6.6 million routed transactions, a substantial increase compared to the 503,000 transactions observed in August 2021, according to River’s Bitcoin-only exchange data. It is crucial to note that River’s reported 6.6 million Lightning routed transactions is considered a conservative lower-bound estimate. The firm acknowledged its inability to assess private Lightning transactions or those occurring between just two participants. According to a report by River, in terms of transaction volume, Lightning processed $78.2 million in August 2023, marking a 546% increase from the $12.1 million recorded in August 2021 by K33. Lightning now handles at least 47% of Bitcoin’s on-chain transactions, signaling its growing importance as a medium of exchange. The average Lightning transaction size in August 2023 was around 44,700 satoshis or $11.84. River estimated that 279,000 and 1.1 million Lightning users were active in September. A significant portion of transaction growth, approximately 27%, was attributed to gaming, social media tipping, and streaming.
And that’s all for last week’s news! Wishing you a great week ahead!
With history in the making as El Salvador makes Bitcoin legal tender on September 7th, 2021, we examine the implications for the country’s financial system, its people, and the global remittance industry.