Swiss multinational investment bank and financial services company UBS is launching a “tokenized money market fund” pilot program on Ethereum (ETH). In a new blog post, UBS Asset Management announces what it calls the “first blockchain-native tokenized VCC fund pilot” in Singapore. Says Thomas Kaegi, Head of UBS Asset Management, Singapore & Southeast Asia, “This […]
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The fund is a part of a wider VCC umbrella that brings various real-world assets to the blockchain.
Leading Swiss bank UBS has launched a live pilot of a tokenized version of its variable capital company (VCC) fund as part of Project Guardian, an initiative led by Singapore’s central bank.
In a press release, UBS Asset Management announced that the fund is part of a broader VCC umbrella designed to bring different types of real-world assets (RWA) to the blockchain. According to Thomas Kaegi, the head of UBS Asset Management for Singapore and Southeast Asia, the project is a milestone in understanding funds tokenization. Kaegi said:
“Through this exploratory initiative, we will work with traditional financial institutions and fintech providers to help understand how to improve market liquidity and market access for clients.”
UBS Asset Management launched the controlled pilot of the tokenized money market fund through the company’s in-house tokenization service called UBS Tokenize. Using a smart contract on Ethereum, the firm carried out various activities, including redemptions and fund subscriptions.
The pilot is also a part of the company’s global distributed ledger technology strategy, which focuses on using private and public blockchains to enhance fund distribution and issuance.
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The new development realizes previous predictions on the tokenization of RWAs. In a panel discussion at the World Token Summit 2023, United Arab Emirates government adviser Ellis Wang told Cointelegraph that tokenization of RWAs gives various advantages like transparency and security, which are features embedded into blockchains. According to the executive, the tokenization of RWAs may catch on, as it presents significant opportunities for many industries.
Earlier this year, protocols focusing on RWAs became a hot topic as they outperformed other subsectors of decentralized finance. On June 9, token gains of RWA tokenization platform Centrifuge had surged by 32% year-to-date.
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Four banking giants are preparing to pay nearly half a billion dollars to settle a class action lawsuit brought against them for allegedly attempting to thwart competition in the stock-lending market. JPMorgan, Goldman Sachs, UBS and Morgan Stanley have agreed to collectively pay $499 million to end the suit, which was filed in 2017 by […]
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The banking giant UBS is facing a hefty fine from the US Department of Justice for its role in the Great Financial Crisis of 2008. The DOJ says UBS has agreed to pay $1.435 billion in penalties to settle allegations that the bank defrauded investors while underwriting and issuing residential mortgage-backed securities (RMBS) in 2006 […]
The post US Demands $1,435,000,000 From Banking Giant for Alleged Fraud and Role in Great Financial Crisis appeared first on The Daily Hodl.
Global banking giant UBS has been fined more than a quarter billion dollars for misconduct at Credit Suisse, its new subsidiary acquired in June. In a press release from the Board of Governors of the Federal Reserve, the Fed says the charges are centered on Credit Suisse’s “unsafe and unsound counterparty credit risk management practices” […]
The post Trillion-Dollar Bank Pays $268,500,000 Fine Over ‘Unsafe and Unsound’ Risk Management Practices At Newly-Acquired Subsidiary appeared first on The Daily Hodl.
A subsidiary of the Bank of China has launched a new, first-of-its-kind tokenized security on the Ethereum (ETH) blockchain. BOCI, a wholly-owned investment bank of the government-owned Bank of China, has announced the rollout of its CNH 200 million ($27.9 million) fully digital structured notes. The notes were created by financial giant UBS on the […]
The post Bank of China Launches First Ever Tokenized Securities On Ethereum (ETH) appeared first on The Daily Hodl.
Banking giant UBS will reportedly lock in almost $35 billion in profits after the Swiss government helped it take over the dying remains of Credit Suisse. According to a report from Bloomberg, UBS will make $34.8 billion on its Credit Suisse takeover, which was initiated earlier this year when the former Swiss behemoth became the […]
The post Government-Backed Deal Allows UBS Bank To Profit Nearly $35,000,000,000 in Credit Suisse Takeover: Report appeared first on The Daily Hodl.
Switzerland’s financial regulator is not satisfied with the emergency plans of two of the Alpine nation’s five major banks. The assessment refers to a period prior to the rescue of Credit Suisse by UBS when the authority viewed the troubled giant’s preparedness in positive terms. 2 Swiss Banks Unable to Implement Recovery Plans, Finma Finds […]
Crypto’s bullish momentum may stall at the $1.2 trillion total market cap resistance, but traders' newfound caution has not translated to excessive demand for short positions.
Cryptocurrency markets have been trading within an unusually tight 5% range since March 17 as conflicting forces continue to pressure the sector. Consequently, in the past 7 days, the total market capitalization gained 3.8%, which was driven mainly by Bitcoin's (BTC) 3.6% price increase and Ether's (ETH) 5% gain.
On March 27, the Commodity Futures Trading Commission sued Binance and Changpeng "CZ" Zhao for allegedly violating trading and derivatives rules, heightening regulatory uncertainty. According to the lawsuit, Binance provided access to leverage for customers trading on the spot and futures markets.
The announcement came just five days after Coinbase received a Wells Notice from the U.S. Securities and Exchange Commission (SEC), which could target the exchange's staking program, listed digital assets, wallet and Coinbase Prime services.
Similar actions occurred outside the U.S., after Japan's Financial Services Agency (FSA) March 31 announcement that several foreign cryptocurrency exchanges, including Binance, Bybit, MEXC Global and Bitget had been operating in the country without proper registration, in violation of the country's laws.
The lateralization trend that began in mid-March has repeatedly tested the crypto market’s $1.14 trillion market capitalization support. The movement suggests that investors are hesitant to place new bets until more information on the lawsuits against Binance and Coinbase is available.
The global banking crisis forced the Federal Reserve to use two different emergency lending programs. As a result, the Swiss National Bank provided more than $100 billion in liquidity to absorb the impact of Credit Suisse and its subsequent sale to UBS. Stocks and commodities have benefited as traditional finance investors seek alternatives to protect against inflation.
Stocks and commodities have benefited as traditional finance investors seek alternatives to protect against inflation. Since March 15, the S&P 500 index has risen 6.6%, gold has risen 4.6%, and oil prices have gained 18.6%. As a result, there are compelling arguments for both an upward and downward trend within the lateral channel which currently limits crypto's total capitalization at $1.2 trillion.
Perpetual contracts, also known as inverse swaps, have an embedded rate that is usually charged every eight hours. Exchanges use this fee to avoid exchange risk imbalances.
A positive funding rate indicates that longs (buyers) demand more leverage. However, the opposite situation occurs when shorts (sellers) require additional leverage, causing the funding rate to turn negative.
The seven-day funding rate for Bitcoin and Ether was neutral, indicating balanced demand from leverage longs (buyers) and shorts (sellers) using perpetual futures contracts.
Traders can gauge the market's sentiment by measuring whether more activity is going through call (buy) options or put (sell) options. Generally speaking, call options are used for bullish strategies, whereas put options are for bearish ones.
A 0.70 put-to-call ratio indicates that put options open interest lags the more bullish calls and is, therefore, bullish. In contrast, a 1.40 indicator favors put options, which can be deemed bearish.
The put-to-call ratio for Bitcoin options volume increased to its highest level since March 9, indicating an excess of demand for neutral-to-bearish puts. This is the inverse of what happened on April 1, when call options were in higher demand.
Related: Unwinding the hyperbole: Are US-based crypto firms really being ‘choked’?
The market is pricing higher odds of downside in the derivatives market. However, given the balanced demand on futures markets, traders are hesitant to place additional bets until regulators' actions are clearer. It is unclear whether the total market capitalization will be able to break through the $1.2 trillion barrier, but professional traders are not currently betting on it.
From a derivatives market perspective, traders are pricing higher odds of downside. However, considering the balanced demand on futures markets, investors are uncomfortable placing further bets until there's a clearer picture of regulators' actions.
Uncertainty exists as to whether the total market capitalization will be able to surpass the $1.2 trillion barrier, but professional traders are currently not betting on this outcome.
The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
Many in Switzerland have said that UBS’ takeover of Credit Suisse was necessary to avoid a calamitous banking crisis like that seen in 2008.
On Sunday, March 19, the 167-year history of banking giant Credit Suisse ended with a takeover by the largest Swiss bank, UBS. Under pressure from the Swiss government, UBS took over its ailing competitor for 3 billion Swiss francs ($3.25 billion) — less than half the $8 billion market value of Credit Suisse just two days before, on Friday, March 17.
A day later, on March 20, shares in Credit Suisse plunged more than 60% in European trading, with UBS down 9%.
To cover any losses UBS may incur in the deal, the Swiss government will provide $10 billion. The Swiss central bank will also make a $108 billion bankruptcy loan available to the banks.
Swiss publication, the Neue Zürcher Zeitung, called the takeover the “biggest economic earthquake in Switzerland since the rescue of UBS in 2008 and the grounding of Swissair in 2001.” A rescue should prevent a crisis that spreads to other banks, akin to what happened 15 years ago after the bankruptcy of Lehman Brothers in the United States. The takeover of Credit Suisse was “necessary” not only for Switzerland but for the stability of the entire global financial system, argued Swiss Confederation President Alain Berset.
The deal spurred mixed reactions in the Swiss political arena. The Free Democratic Party of Switzerland (FDP) praised it, stating that the takeover was necessary to avoid severe damage to Switzerland as a financial and economic center.
Criticism came from the co-president of the Social Democratic Party of Switzerland, Cédric Wermuth, who tweeted that nothing had changed since the 2008 financial crisis. “The whole financial system is sick and absurd,” he said, adding that the state must step in again and save it.
Marcel Fratzscher, president of the German Institute for Economic Research, believes the takeover could lead to one giant bank, which would provoke instability across the board in the event of a notional collapse.
In an interview with Die Tageszeitung, the German economist said the current situation is nowhere near as worrying as before the global financial crisis of 2008. “Today, it is the sharp increases in interest rates by the central banks that have taken many financial institutions by surprise and have led to massive losses.”
In other words, the problem today is “not systemic interdependence between financial institutions or inadequate provisioning in terms of liquidity and capital, but unusually aggressive monetary policy.”
“This takeover of Credit Suisse by UBS has sent many into a deep shock,” said Olga Feldmeier, co-founder of Swiss investment platform Smart Valor, speaking to Cointelegraph. Until 2014, she was an executive director and head of sales in the wealth management business at UBS.
“It had been known for a long time that things were not going so well at the bank. But who would have thought that the bank, which was once worth $80 billion, would be the subject of a $3 billion takeover by its arch-rival UBS?” According to Feldmeier, it’s not just the 50,000 employees who are shocked. The lenders have been hit even harder, especially those with a special high-grade bond type — the so-called Additional Tier 1 Capital.
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But when asked what the alternative would be, Feldmeier agreed that without this takeover, the consequences would be catastrophic. “After all, where is it safe if one of the top 30 systemically important — and Swiss — banks go bankrupt? In a systemic bank run, neither the European Central Bank nor the Fed would be able to help.”
Mauro Casellini, board member at CCA Trustless Technologies Association and, until January 2023, CEO at Bitcoin Suisse Liechtenstein and head of Bitcoin Suisse Europe, shared a similar view.
He told Cointelegraph that it was right that the government and regulators in Switzerland acted quickly to find a solution with the least possible negative impact on the market.
“Although there had been signs for some time that things were not going smoothly at Credit Suisse, it was difficult for outsiders to see just how critical the situation was. It is too early to say whether this was the right solution, but the sheer size of this new ‘super bank’ is impressive and regulatory pressure is likely to increase,” Casellini said.
The banking crisis has brought some good and some bad for crypto. Despite negative macroeconomic developments, the crypto market performed well when news broke that UBS would take over Credit Suisse. Bitcoin (BTC) won the crypto rally with a gain of 15.5% (reaching $28,671 on March 22). Ether (ETH) gained 3.9%. Driven by the BTC price rally, the share prices of listed Bitcoin mining companies have risen by as much as 120% since the beginning of the year.
According to Feldmeier, it’s a positive phenomenon for crypto exchanges, both big and small. “More trading, higher sales, some of the long missed tailwind would not hurt our industry,” said Feldmeier. “This also increases the certainty that the Bitcoin cycle keeps what it promises — namely, the next bull run around Bitcoin halving in March 2024”.
The loss from clients and investors in traditional financial institutions could positively affect the crypto market as investors turn to alternative assets, such as cryptocurrencies.
However, the Credit Suisse acquisition and the fact that the banking industry faces many different risks and challenges worldwide also has a negative side. Banks are still important partners for crypto companies. If banks are not doing well, they will be even less willing to work with crypto companies or raise fees, which will not make life easier for the crypto industry.
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The recent closures of fiat on- and off-ramp banks such as Silvergate and Signature, followed by the collapse of Credit Suisse, have created “significant risks for the crypto market,” said Casellini. According to the expert, it was necessary “to address issues such as regulation, security, and transparency to build trust with investors and ensure the long-term viability of the market. Regulation will help our industry in the long run to build a successful and more decentralized alternative to the traditional financial system.”
Casellini also expects to see more challenges and risks in the future due to the changing interest rate landscape and additional requirements on banks.
“It will be interesting to see how governments and especially national banks react, and whether they will save struggling banks or let them fail.”
