To be sure, institutional participants are slowly entering the crypto / blockchain community.
According to a 2019 Fidelity Investments survey, approximately 22% of institutional investors already have exposure to digital assets, and most of these investments have been made within the past three years. In addition, four out of ten respondents said they are willing to invest in digital assets in the next five years.
Chainalysis co-founder and chief strategy officer Jonathan Levin told Cointelegraph:
Institutional investors' participation in cryptocurrencies in 2019 is mainly to build infrastructure, such as the opening of Fidelity Digital Assets and Bakkt.
Libra Association (Stable Coin)
In June 2019, Facebook announced the launch of the new digital currency Libra and established the Swiss-based non-profit Libra Association ( Libra Association) to manage the world of cryptocurrency and finance , whose mission is "to help reshape wealth and transform the global economy."
This approved blockchain-based currency will be linked to a basket of bank deposits and short-term government securities. The new association was created by 27 corporate partners including Mastercard, PayPal, Visa, Vodafone, eBay and Uber.
However, the project immediately encountered immediate resistance, especially from global regulators worried about their fiat currencies and the establishment of a shadow banking system. Two U.S. senators wrote a letter to MasterCard and Visa, expressing "deep concern" that the project could destabilize the global financial system and promote crime and terrorist financing.
Apple CEO Tim Cook said that companies like Facebook should not be in charge of global currencies. Partners (of Libra) withdrew, and by the end of 2019, a quarter of the original partners disappeared, including Visa, Mastercard, PayPal and eBay.
However, reports of Libra deaths may be premature. In anticipation of Libra's debut, the Central Bank is encouraged to pilot its own digital currency project, and in early December, the Libra Association is still planning to launch stablecoins for 2020 in at least some parts of the world, such as Europe.
JP Morgan Chase (Stablecoin)
In February 2019, JP Morgan, the largest bank in the United States, launched JPM Coin, which claims to be the first bank to create and test digital tokens representing fiat currencies. The goal is to allow bank institutional customers to make instant payments on a licensed blockchain platform.
The stablecoin should be redeemed 1: 1 in the legal currency (USD) held by JP Morgan Chase Bank, which is different from most stablecoins, such as Tether (USDT) and USD Coin (USDC) claiming 1: 1 legal collateral. It was originally scheduled to launch at the end of 2019, but as of December 10, 2019, it has not been released publicly.
Although CEO Jamie Dimon once called digital currencies "fraud", JP Morgan has been actively exploring plans related to blockchain and cryptography for years. Its interbank information network is a bank payment and data sharing network based on JP Morgan's internal blockchain platform Quorum. It was implemented in 2018 and currently has 365 global members and will expand to Japan in 2020.
Intercontinental Exchange / Bakkt Exchange (Exchange)
In September 2019, a new institutional-scale exchange joined the cryptocurrency world. At the time, the Intercontinental Exchange (ICE) , which also owned the New York Stock Exchange, launched Bakkt , which was the first to provide physical settlement Bitcoin (BTC). Futures contract exchange . In contrast, the Chicago Mercantile Exchange has been settling BTC futures contracts in fiat currencies instead of Bitcoin since December 2017 .
After a slow start, Bakkt's bitcoin futures trading volume has increased slightly until 2019, and reached a record high of 5671 futures contracts on November 27 (trading volume: $ 42.5 million).
In early December, Bakkt launched the first regulated Bitcoin options and cash-settled futures in the United States . The announcement was made by Bakkt CEO Kelly Loeffler A few days after being appointed to fill a U.S. Senate seat in Georgiany's retired Johnny Isakson (R).
US Commodity Futures Trading Commission
Heath Tarbert , the forthcoming chairman of the US Commodity Futures Trading Commission ( CFTC ) , said in October that Ethereum ( ETH ) and Bitcoin are commodities, not securities. 》 Regulation, with the Commodity Futures Trading Commission as its main regulator.
My guess is that you will see Ethereum-related futures contracts and other derivatives that may be traded in the near future,
This statement provides clear oversight for developers and investors in Bitcoin and Ethereum, and to some extent eases current and future pressures. If the CFTC is going to regulate BTC and Ethereum, then certainly they will not be banned. This is a real problem.
In her first public appearance in October, Tarbert also emphasized the importance of blockchain and digital assets. Perianne Boring , CEO of the American Digital Chamber of Commerce , said that the United States has been lagging behind in blockchain innovation, with little support from US policy makers and regulators. However, the CFTC Chairman said here:
I want the United States to take a leadership role, because anyone who is ahead of this technology will eventually write the rules of the game.
Boring told Cointelegraph that this was an "extremely important" development.
Fidelity Investments (custodian)
Arguably, hosting is not the most exciting part of the crypto world, but it is a vital part, especially as the industry matures. It is reflected in many realistic investment decisions. For example, how do older Bitcoin holders pass their BTC to their heirs after their death?
In 2019, Fidelity Investment Corporation, a mutual fund giant (under its management of $ 7.2 trillion), has accelerated the full launch of its Fidelity digital asset custody unit. After four years of construction, it aims to hedge funds, family financial offices Institutional investors such as market intermediaries.
The company's carefully planned deployment route has a series of landmark features : a preliminary study (2014), the establishment of a blockchain incubator and the start of a proof-of-concept process (May 2015). Bitcoin as a charitable donation (November 2015), academic and industry partnership established (June 2016), announcing acceptance of Ethereum's charitable donations (September 2017) and Fidelity Digital Assets division announcement (October 2018 ).
In mid-December 2019, Fidelity Digital Assets announced that if there is sufficient demand, it will increase support for Ethereum in 2020.
Public Utility Settlement Token Project / Fnality International (Banking Union)
Resolving cross-border transactions is often considered a promising use case for blockchain technology, and in 2019, a global banking alliance began to put this proposition into practice.
In June, 14 financial institutions from the United States, Europe and Japan jointly invested $ 60 million in the new company Fnality International. The company will create a utility settlement coin based on the underlying Ethereum protocol to handle interbank settlements. Tokens (USC)-backed by cash collateral deposited with the central bank.
The Utility Settlement Coin project was led by UBS in 2015. Other shareholders include Santander, Bank of New York Mellon, Barclays, Imperial Bank of Canada, Commerzbank, Credit Suisse, Netherlands International Group, KBC Group, Lloyds Bank Group, Mizuho Bank, MUFG Group, Nasdaq, Mitsui Sumitomo Bank and State Street Bank and Trust.
A key challenge for the alliance will be interoperability, according to Olfa Ransome, Chief Commercial Officer of Fnality:
Not only to achieve interoperability between traditional, digital venues, platforms, but also to achieve interoperability between competing blockchains-regardless of standards and protocols, support atomic settlement-and on different chains payment method.
Once approved by regulators, the platform is expected to be operational in mid-2020.
Fairfax County Retirement System (Pension)
In February, the Fairfax County Retirement System (FCRS) in Virginia became the first US pension fund to invest at least a portion of its retirement assets ($ 21 million) in cryptocurrency assets . The FCRS explained to its participants that distribution through Morgan Creek Digital is only a small part of the system's assets,
Whereas the blockchain technology industry is still in its early stages.
The company reportedly invested another $ 50 million in Morgan Creek's second digital fund in October.
The conservative rules of pension funds have made them reluctant to buy cryptocurrencies to this day. They are usually more cautious about hedge funds and university endowments.
Chicago Mercantile Exchange (Exchange)
Bakkt attracted headlines from many cryptocurrency exchanges in 2019, but the Chicago Mercantile Exchange ( CME ) , the world's largest futures market , has the most bitcoin futures contracts. At its peak in May 2019, the average daily trading volume of CME Group was US $ 515 million, with more than 13,600 futures contracts per day. On May 13 alone, Bitcoin's daily transaction volume reached a record 33,677 contracts, which was equivalent to more than 168,000 BTC (then valued at $ 1.705 billion).
However, CME activity has declined by the end of 2019-from an average of more than 7,000 bitcoin futures contracts per day from May this year to less than half by early December.
CME Group continues to expand its supply of crypto products, but announced in November that it plans to launch options for Bitcoin futures contracts in mid-January 2020. Some in the industry believe that the Bitcoin derivative market will one day dwarf the BTC spot market.
B3i Services AG (Insurance Alliance)
In July, the well-known blockchain alliance B3iServices AG of the insurance industry announced its first product, the scope of coverage for catastrophe excess loss reinsurance. The alliance expects it to be available during the January 2020 renewal season.
B3i (formerly known as the Blockchain Insurance Industry Program), established in 2018, uses blockchain technology to reduce friction in risk transfer. Every reinsurance contract in the network is written as a smart contract on the open source Corda blockchain platform. Smart contracts can automatically verify conditions and can determine, for example, whether the asset should be returned to the agent or the source, or a combination of both.
B3i started experimenting with the Ethereum blockchain from five insurance companies in May 2016 . Today, the consortium includes 18 insurance companies and reinsurance companies from five continents, including Egon, Allianz, AXA, Swiss Re, LibertyMutual, Munich Re, TokioMarine and Scor.
Harvard University (University Donation)
In April, when it was reported that Harvard's investment arm, Harvard Management Company ( assets : $ 38.3 billion), made its first crypto investment, it was hailed as a victory in the cryptocurrency / blockchain field, which has been working to attract strong Institutional investors.
It is true that the investment in Blocktool Token, a blockchain tool maker , is worth less than $ 12 million, and is a small part of the world's largest university endowment fund, but under the leadership of Yale University in 2018-the school invested by Crypto funds managed by Andreesen Horowitz and Paradigm may signal a growing trend for leading US universities. Cointelegraph reported in May that other elite university funds such as Stanford University and MIT have been quietly testing the waters in the cryptocurrency space.
Compliance issues persist
However, there are still major obstacles before institutions can actually insert their own banner into the crypto / blockchain space. Chainalysis conducted a poll of financial institutions in November last year , and half of the respondents stated in one form or another that compliance was a problem that prevented them from investing more in cryptocurrencies. In addition, 39% said they were concerned about the inability to control illegal activities, while nearly 18% said they were unsure whether they were capable of complying with government regulations.
However, as Fidelity, JPMorgan and ICE and other heavyweight institutions continue to increase their commitments, and even endowment funds and pension funds have caused a lot of sensation.There are clear signs in 2019 that large institutions 2020 will be closer to the adoption of cryptocurrencies and blockchain technology.
Original link: https://cointelegraph.cn.com/news/2019s-top-10-institutional-actors-in-crypto