The securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended or with any other regulatory authority of any State or other jurisdiction of the United States or Canada and (i) may not be offered, sold or delivered within the United States or Canada, or to, or for the account or benefit of any U.S. Person or Canadian, and (ii) may be offered, sold or otherwise delivered at any time only to transferees that are Non-United States Persons and Non-Canadians.

January 16, 2024

Circle IPO; Larry Fink; Moody’s fund tokenization report

Welcome to Swarm Markets’ media memo. This weekly update provides comments from Swarm Markets’ co-founders, Philipp Pieper and Timo Lehes, on key industry news that has caught our eye, plus our own developments.


Comments available on the following news items:


  • Circle files for an IPO
  • Larry Fink’s technological revolution comments
  • Moody’s report on tokenized fund risks


Circle plans 2024 IPO 


Major stablecoin issuer Circle is reportedly planning an initial public offering (IPO) this year. If its application process is a success, it will present a major step forward for tokenized real world asset (RWA) acceptance in the wider financial market. 


Tokenization is a major theme for the DeFi sector right now, but stablecoins are one of the earliest derivations of this market – as they are inherently just tokenized fiat currencies such as the dollar or euro. 


Circle had an abortive attempt to go public back in 2021 via SPAC, but clearly feels confident enough to take a second crack at listing on the stock market now. Stablecoins are a relatively competitive field, with Circle’s circulation down a fair amount in recent months. But a stock market listing could provide a valuable bellwether for the market. 


Stablecoins work. Although the stablecoin market has experienced setbacks similar to wider crypto, they still form one of the key technological bridges between traditional finance (TradFi) and the digital asset sector. 


Larry Fink is (unsurprisingly) on the tokenized money


The bitcoin ETF represents two of the biggest financial markets innovationsETFs and blockchain. 


In the wake of the launch of a swathe of bitcoin ETF’s the BlackRock boss has made some notable comments. Fink believes the ETFs are a stepping stone to wider digital asset tokenization. 


Of course, this is something Swarm has been close to for some time now, but it is a watershed moment when the CEO of one of the world’s biggest financial firms underlines just how big a moment this is in technological terms.


The ETFs have brought one of the key crypto assets to a wider market. But the entire face of the financial industry stands at the starting point of wider digitalization of financial assets. Bonds, equities, property (housing) and just about any kind of real world asset will soon go on chain. 


This isn’t about creating more layers of complexity, but about transparency, ease of transfer and verifiable digital ownership. In a sense, we created the internet over 30 years ago, but finance only joined inasmuch as it decided to start sharing spreadsheets. 


We’re now talking about a much more fundamental shift, whereby ownership of the world’s wealth becomes fully digitally integrated. 


Moody’s report on tokenized fund adoption asks the right questions 


Ratings agency Moody’s has launched a new report on the rise of tokenized investment funds. The report raises key points around the growth of the sector. While it sees much adoption growth, the risks associated with this are also patent.


What we would say in response to those risks is that they certainly are present, but it is incumbent on the sector, and states and regulators to manage the growth of the market and ensure compliance and high standards in risk management, security and consumer protection.


Regulation should be at the core of any proposition looking to adopt tokenized assets and offer services to customers along these lines. But this is the same for TradFi too – DeFi carries risk in the same way as any other type of financial asset, infrastructure or product. 


Moody’s cites the limited track records of many tech-focused DeFi projects, but there should be a more nuanced approach for anyone with an interest, or a stake, in the sector. This is best done through a regulation-first mindset.