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 30, 2024

Stablecoin regulation; Swiss regulator; Bitcoin ETF goes global

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:


  • Legislators around the world narrow sights on stablecoins
  • Swiss tokenized asset platform approval
  • Bitcoin ETF momentum going global


Stablecoin development gathers pace as legislators focus on the tech 


The stablecoin market is garnering greater attention than ever as legislators in regions around the world look to enable greater sector growth through proactive regulation. 


This attention is only set to grow as we enter a new sustained bull run this year. 


As crypto markets continue to mature, users will increasingly rely on such tools as stablecoins to access digital assets. Stablecoins also bring new economics on chain that traders and yield farmers will increasingly rely upon as we go into a sustained bull run.


Stablecoins are one of the few things that have verifiably worked on chain and have weathered significant headwinds in the past two years.


A raft of legislators are turning their attention to stablecoins as a result. The UK is looking to become a stablecoin leader for example, while Patrick McHenry, chair of the House Committee on Financial Services, is sponsoring the Clairity for Payment Stablecoins Act, which makes provision for issuers in the U.S., giving them regulatory protections and grounding. 


This isn’t being done out of sheer indulgence on the part of legislators either. As recent coverage suggests, the progress toward stablecoin regulation is attracting major financial institutions in financial centers such as Hong Kong, which is launching a stablecoin sandbox managed by the Hong Kong Monetary Authority (HKMA) and Singapore, which was one of the first jurisdictions to agree on stablecoin rules last year. 


While regulators have had their fingers burned by sharper ends of the crypto market, what is clear is that stablecoins are here to stay. As a result, we’re in a regulatory arms race to provide the most accepting environment for innovators while protecting consumers and market participants alike. 


Swiss approval of tokenized asset platform is a major positive signal


The Swiss regulator, the Swiss Financial Market Supervisory Authority (FINMA), has approved a digital asset infrastructure provider in a big seal of approval for the market in digital assets. Retail users in Switzerland can now access digital assets and securities via Taurus in the country.


As a major financial center and oftentime leader in regulatory approach, the approval marks another important milestone for the global digital asset market, with a range of firms issuing digital assets on the platform. 


The growth of digital real world asset (RWA) markets is highly encouraging, especially when it comes from a regulatory-first approach. RWAs are the distillation of TradFi markets with DeFi technologies and advancements. 


What is clear is the only grounds for this market to grow will be on the terms of the regulators who oversee RWA trading, custody and ownership. Whereas the crypto market of old created notionally valuable assets which lacked heritage or often even use cases, digitized RWAs offer clear demand and value profiles. 


What is different is the technology used to manage and verify ownership and interaction with those assets. We expect to see more offerings come to market this year around the world, to add to that of our own and other major participants in the space. 


Bitcoin ETF influence is going global 


The launch of bitcoin spot price ETFs in the US has been the major story in crypto in 2024 so far. And this doesn’t look likely to diminish any time soon.


The irony here is that the US is far behind in terms of innovation (under the purview of regulators) in other areas, but with such major financial institutions stateside, it was always going to be a leader when it came to banner products such as the ETF market.


Now, other countries look to be racing to catch up. Major regions such as the EU, UK, and other still lack access to spot price instruments for bitcoin. But this appears to be changing, with regions such as Hong Kong receiving ETF applications.


We expect other countries to follow suit in this regard soon. While the US is a major market it is most certainly not the be all and end all of markets. Opening bitcoin to US institutional money has had notable effects on trading volumes of the cryptoasset, as more regions join the market it will continue to accelerate this activity.