XRP primed for institutional adoption in Asia via tracker fund launch

Zodia Custody and Blockdaemon Partner on Institutional StakingLondon-based cryptocurrency storage provider Zodia Custody, a portfolio company of Japan’s SBI Holdings, has entered into a partnership with blockchain infrastructure provider Blockdaemon relative to crypto staking.Photo by Traxer on UnsplashInstitutional interestBlockdaemon announced the crypto staking collaboration, tailored to institutional clients, on Twitter on Tuesday. This move comes as institutional interest in staking, the process of contributing digital assets to support blockchain networks and earning rewards, continues to surge.Following the Ethereum network’s Shapella upgrade on April 12, the amount of ether (ETH) staked increased by an impressive 4.4 million, reaching a total of 22.58 million ETH (equivalent to $42 billion) as of May 23. This remarkable growth in staked assets reflects the growing confidence in the Ethereum network and the potential for substantial returns.First bank-owned custodianZodia Custody is a subsidiary of the well-known multinational bank Standard Chartered and backed by prominent institutions such as Northern Trust alongside SBI Holdings. It claims the title of being the first bank-owned custodian to provide staking services exclusively to institutional clients. This collaboration enables Zodia Custody to leverage Blockdaemon’s infrastructure to deliver secure and efficient staking solutions, catering to the specific needs of institutional investors.Blockdaemon has been at the forefront of facilitating seamless integration between traditional financial institutions and the emerging crypto industry. Earlier this year, the company introduced a wallet service targeted at the institutions and crypto custodians. The wallet assists clients in managing their assets securely, eliminating the need for third-party storage solutions. By partnering with Zodia Custody, Blockdaemon expands its portfolio of services, capitalizing on the rising demand for staking among institutional investors.The firm’s CEO and Founder, Konstantin Richter, stated that the partnership with Zodia “allows stronger security, automation and simplification of the process to participate in staking, truly accelerating Web3 innovation.”LMAX collaborationEarlier this month Zodia partnered with digital asset trade execution specialist LMAX Digital to provide a combination of institutional-grade trading infrastructure and custody services to crypto asset manager, Coinshares.Institutional investors, traditionally cautious about entering the crypto ecosystem, are now becoming more proactive in engaging with digital assets. Staking, with its potential for consistent and predictable returns, has emerged as an appealing opportunity. By participating in staking, institutions not only contribute to the efficient functioning of blockchain networks but also enjoy the rewards associated with validating transactions and securing the network.The partnership between Zodia Custody and Blockdaemon exemplifies the industry’s efforts to bridge the gap between traditional finance and the rapidly evolving world of cryptocurrencies. As more institutional clients seek exposure to digital assets, it becomes essential to provide them with secure and reliable solutions tailored to their specific requirements.With demand for staking services continuing to rise, institutional players are recognizing the value of taking a more active part in the crypto ecosystem. With Zodia Custody and Blockdaemon leading the way, the opportunities for institutional clients to engage in staking and reap the rewards are set to expand, further fueling the growth of the entire crypto industry.

Dubai's regulator, the Virtual Asset Regulatory Authority (VARA), has been ahead of the curve by comparison with its peers internationally in getting a crypto regulatory framework in place, and now it's moving to tweak those regulations further. In a press release published via ZAWYA on Sept. 26, VARA announced an update to its crypto regulations which specifically deals with marketing. Its addition of “Marketing Regulations for Virtual Assets and Related Activities 2024” applies to virtual asset service providers (VASPs) operating within the Emirate of Dubai. In tandem with the updated regulations, VARA has published a marketing guidance document to assist VASPs in abiding by the regulations, providing detailed instructions and outlining best practices in terms of the application of appropriate marketing activities. Photo by ZQ Lee on UnsplashMandatory disclaimerOne of the new requirements demanded by the regulator is that marketing content related to digital assets should incorporate a disclaimer outlining to investors that there are financial risks associated with digital assets. To that end, from October 1 onwards, VASPs are required to add the following disclaimer, prominently displayed, within product marketing material: “Virtual assets may lose their value in full or in part and are subject to extreme volatility.” In its guidance documentation, VARA has stipulated that any content which contains contradictory messaging or information provided to users in “small print” is not deemed to be acceptable. The rules apply to both licensed entities and any unlicensed entities that attempt to offer a service within the Emirate of Dubai.  Consumer protectionThe motivation behind the regulatory update is the protection of consumers through the prevention of the dissemination of misleading information. The regulator wants consumers to be well-informed about crypto products, such that they’re aware of both the risks and opportunities associated with digital assets. VARA has set out a schedule of fines, broken down by category, with fines of up to 10 million United Arab Emirates (UAE) dirhams (AED), around $2.7 million, applying for those who do not comply. Commenting on the updated regulations, VARA CEO Matthew White stated: “Our updated marketing regulations and the newly issued guidance document reflect our commitment to maintaining Dubai’s position as a global leader in digital finance. We believe that by providing clear and actionable guidance, we can help VASPs deliver their services responsibly, while fostering greater trust and transparency in the market." The Dubai regulator isn’t the only one to home in on the marketing approach taken by crypto service providers. Since October 2023, the UK Financial Conduct Authority (FCA) has implemented new rules which specifically deal with the marketing of crypto products and services. Many crypto platforms found the new requirements too arduous to follow. Some withdrew from the market while others did so on a temporary basis while working towards becoming compliant. Within the European Union, the Markets in Crypto Assets (MiCA) regulation came into force in June 2023. Those regulations demand that crypto service providers provide information and conduct marketing activities in a clear, fair and non-misleading manner.

Official Says Hong Kong Should Invest in Web3 EconomyAccording to Hong Kong’s financial secretary, Paul Chan, this is the perfect time for Hong Kong to promote the development of Web3, the next-generation version of the World Wide Web that is decentralized and distributed through the use of blockchain and similar technologies.©Pexels/Tara WinsteadLearning from the dot com boomDespite the recent instability of the virtual assets market and the collapse of some digital asset exchanges, Chan has pointed out that the quality of the real economy has improved since the dotcom bubble burst in 2000, and surviving market players have focused on technological innovation, applications and value creation.In remarks made via a blog post published on Sunday, Chan argues that the development of Web3 is going through the same process. He suggested that the next stage of development would be to focus on developing blockchain technology more deeply to find wider application for it, which would improve existing business models, ultimately benefiting users and improving the quality of the real economy.To accelerate the development of Web3, Chan allocated HK$50 million (US$6.4 million) to the Cyberport business park to organize major international conferences and youth workshops in his latest budget released in February.VASP licensingChan also announced that authorities would introduce a licensing regime for virtual asset service providers (VASPs) in June to ensure appropriate supervision and minimize risks in the innovation and development of Web3. Furthermore, the government is looking into regulating stablecoins or cryptocurrencies with their value pegged to another currency or commodity.According to some local experts, Hong Kong should not delay in pushing Web3 development, and the government should work out clear policies to attract overseas investors and Web3 developers to set up offices in Hong Kong.Working towards a Web3 hubFrancis Fong Po-kiu, honorary president of the Hong Kong Information Technology Federation, told the South China Morning Post that the government could help by building up infrastructure such as data and supercomputing centers to help small and medium-sized enterprises to adopt more advanced technology.Although IT sector veteran Joseph Leung Wai-fung agreed that Hong Kong was lagging Singapore in terms of Web3 development, he suggested that the government should step up efforts to attract overseas investors and Web3 developers by working out clear policies to support them in setting up offices in Hong Kong. He also pointed out that Web3 covers key areas such as artificial intelligence, the Internet of Things, blockchain technology, and metaverse augmented reality, and that every international smart city should explore this area.The recent fluctuations in virtual asset markets and the collapse of some online trading platforms have cast doubts on the future of Web3, but Chan believes that competent market players who survive a “burst bubble” can focus on innovation and make significant strides.The government’s efforts to accelerate the development of Web3 through the allocation of HK$50 million to the Cyberport business park, the introduction of a licensing regime for virtual asset service providers, and the regulation of stablecoins, are steps in the right direction. However, more needs to be done to attract overseas investors and Web3 developers to set up offices in Hong Kong and to build up infrastructure such as data and supercomputing centers to help small and medium-sized enterprises to adopt more advanced technology.