Hong Kong advances tokenization as institutions continue building amid market pullback

Ribbon Finance Enables Altcoin Options TradingSingapore’s Ribbon Finance, a project that offers a suite of DeFi protocols that help users access crypto-structured products, has enabled altcoin options trading via its Aevo decentralized exchange (DEX).The Ethereum-based platform has begun offering options relative to cryptocurrencies beyond the top two of Ethereum and Bitcoin. Examples of coins that users of Ribbon Finance’s Aevo DEX can access as options include Lido’s LDO, Sui’s SUI token, APT, the token of high throughput proof of stake-based blockchain Aptos, the ARB token of layer two Ethereum scaling network, Arbitrum and Litecoin (LTC).Trading options on-chainThe Aevo DEX project took to Twitter on Monday to announce the development. The project has named the options product “Aevo OTC,” terming it as “the best place to trade altcoin options on-chain.” The firm claims that it’s the first platform to allow users “to trade altcoin options on-chain, in size, with institutional grade liquidity providers.”To kick things off, users will be enabled in trading these altcoin options across weekly, bi-weekly and monthly maturities relative to thirteen crypto tokens. The project plans to rotate the list of coins available for options trading every month depending upon what it deems to be the most popular coins on the market at a given time.Early service adoptersAs Aevo is a DEX, it will utilize on-chain margin systems. When a user buys an option the counterparty is required to post margin of approximately 30% of the notional trade size in the form of US dollar stablecoin, USDC. That procedure is all on-chain and transparent, enabled via smart contracts.Although officially launching the product today, Aevo OTC has been used in production for a number of weeks already. Both digital assets firm Galaxy Digital and crypto-native investment firm CoinFund have already been using the product to trade options.Other early adopters of the product include DeFi R&D and liquid crypto investment strategies firm Re7 Capital and crypto options and structured derivatives firm, OrBit Markets. In fact, Galaxy and OrBit Markets, alongside GSR, are acting as market makers for the product, enabling users to get instant quotes.Developing the crypto options marketThe development means that market participants can now strategize and take advantage of trading altcoins relative to specific events that may be fundamental to a project, such as Litecoin’s halving, for instance. At a later stage, the project intends to enable users in writing options contracts to include customized margins and a specified counterparty.The crypto options market is still at a very early stage of development. Deribit has been the dominant crypto options platform. Ribbon Finance’s service rollout broadens that market, extending options trading beyond the current limited offering of bitcoin, ethereum and solana.The product is more capital efficient for market participants as its portfolio margin system calculates real-time margin requirements, in that way offsetting money-making and losing positions relative to a particular portfolio.Photo by Shubham Dhage on Unsplash

Ripple APAC executive predicts institutional adoption surge in 2024Fiona Murray, the Managing Director overseeing the Asia-Pacific region (APAC) at enterprise blockchain firm Ripple, envisions a substantial uptick in institutional adoption of cryptocurrencies in the upcoming year.Photo by Kanchanara on UnsplashEmphasis on AsiaMurray set out her predictions for the coming year in a thread of posts on the X social media platform on Monday. This foresight coincides with a notable upswing in interest from traditional financial institutions within the digital currency market, especially in the APAC region.Murray predicts an unprecedented surge in cryptocurrency adoption within financial institutions, underscoring a shifting landscape where companies increasingly leverage cross-border payment solutions powered by blockchain technology. She wrote:”Entering 2024, we are expecting to see a surge in institutional adoption of crypto by financial institutions, especially in the APAC region. This includes the greater usage of cross-border payments among companies.”Web2 firms to integrate blockchainThis departure from traditional payment methods signifies a growing confidence in the security and efficiency offered by digital currencies. Ripple’s APAC executive emphasizes the escalating investments by well-established Web2 companies and legacy payment institutions as they integrate blockchain utility into their offerings.“More than ever, leading Web2 companies and legacy payments institutions are investing resources to integrate blockchain utility into their services — ‘Nearly half of APAC finance leaders expect blockchain to have a significant impact on business in the next 3 years.’” she stated.This positive outlook is reinforced by proactive measures taken by countries like Singapore and Hong Kong, positioning themselves as global leaders in cryptocurrency and blockchain adoption.Crypto ETFsThe continued rollout of crypto exchange-traded funds (ETFs) adds to the level of institutional adoption that has occurred in 2023 and is likely moving forward into 2024. Hong Kong has been the regional leader in this regard within APAC. The Hong Kong Stock Exchange was the first platform in Asia to offer crypto asset exposure by way of an ETF in December of last year. Since then, several such ETFs have been listed within the Chinese autonomous territory.Last month, multinational investment bank UBS joined industry peers like HSBC in following suit to offer institutional clients access to crypto-linked ETFs. Going into 2024, most industry commentators seem to be convinced that the emergence of BlackRock, the world’s largest asset manager, in promoting a spot bitcoin ETF in the United States means that approval is likely over the course of the next few months. That milestone will undoubtedly have positive reverberations for institutional digital asset adoption in the APAC region also.Strategic importance of APACThe APAC region holds strategic importance for Ripple’s expansion plans, given its rapid technological advancement and openness to innovation. In Singapore, the company received “in principle” approval from the Monetary Authority of Singapore in June. That was upgraded to full license approval in October.Singapore and Hong Kong, among other countries in the region, have emerged as frontrunners in the global cryptocurrency market, fostering regulatory environments conducive to blockchain innovation.These factors underscore the region’s crucial role in Ripple’s global strategy, aligning with the company’s vision and objectives as it seeks to grow its business.

Among various accounts within a bank, a demand deposit account is considered a “station” where people can temporarily store their money and easily withdraw it for future investments. These accounts are highly liquid, since users can deposit or withdraw funds at any time without having to pay a penalty to a bank.  Following the recent cryptocurrency boom, the five major banks in Korea – KB Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank and NH Nonghyup Bank – are seeing a significant influx of funds into their demand deposit accounts, according to local media outlet Money Today. This is partly attributed to an increasing number of youths who are seeking to invest in crypto assets, parking their money in these banks’ demand deposit accounts. Shinhan Bank and Nonghyup Bank have seen the highest increase in their deposits, owing to their affiliation with local crypto exchanges that have access to real-name accounts from these banks. Photo by André François McKenzie on UnsplashBTC’s surge attracting young investors to cryptoExperts say that these deposits could be potentially transferred to the crypto market by owners as Bitcoin’s value continues to climb. An insider from a crypto exchange noted that the bullish crypto market, spurred by the U.S. approval of spot bitcoin ETFs, is driving a number of young investors to turn to crypto investments, encouraging them to channel their deposits into buying crypto tokens.  Data from these five major banks shows their total demand deposits by the end of February exceeded KRW 614 trillion ($460 billion), seeing a month-over-month increase of about KRW 23.5 trillion. During the same period, the banks’ combined regular savings grew by KRW 23.6 trillion, while their combined installment savings saw a decrease of KRW 13.3 trillion. This came after the government-led savings product “Youth Hope Installment Savings” reached its maturity, which returns users their principal with relatively large interest gains.  Banks scrambling to attract crypto investors with new savings productsIn response to the potential decline in interest rates in the second half of this year, an increasing number of customers are seeking to put their money into savings products with an interest rate of as low as 3%, according to a banker. In a bid to attract more users, local banks are busy introducing new savings products.  KB Kookmin Bank launched a savings product offering a relatively high annual interest rate of up to 4%, and Shinhan Bank rolled out a savings product targeting youths with an annual interest rate of up to 3.85%.  Meanwhile, Kbank, an online-only bank, is deemed among the largest beneficiaries of the crypto boom, as the bank saw its average daily new customers triple compared to last year. Since 2020, Kbank has served as the provider of real-name accounts to Upbit, the leading crypto exchange in Korea.  Ha Joon-kyung, a professor at the Department of Economics at Hanyang University, said the sudden surge in demand deposits means that a significant portion of these funds will be invested in high-yielding but risky assets, including cryptocurrencies, stocks and real estate.