Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Voices
US-UK AI Safety Partnership Announced. What About Canada?
AI | April 3, 2024
Image: Freepik/rawpixel.com
US and UK Announce Global AI Safety and Innovation Partnership
The United States and the United Kingdom have announced a strategic partnership to advance the science of artificial intelligence (AI) safety. Amid escalating concerns over the capabilities of next-generation AI technologies, the collaboration aims to develop robust testing frameworks for AI models, ensuring they serve societal needs while mitigating potential security and ethical risks. By focusing on the responsible development and deployment of AI, this partnership sets a precedent for global cooperation in technology governance.
- The formal agreement was solidified by US Commerce Secretary Gina Raimondo and British Technology Secretary Michelle Donelan in Washington, DC. This partnership, emerging from commitments at the AI Safety Summit in Bletchley Park where 28 nations including Canada agreed to The Bletchley Declaration on Frontier AI.
- The UK has pledged more than 100 million pounds ($125.5 million) to initiate nine new research hubs, emphasizing AI's governance and safety. The US has also been proactive, with plans to enhance its AI safety team and proposals requiring US cloud companies to monitor foreign AI model training within their data centers. These measures reflect both nations' dedication to a secure AI-powered future.
See: EU Lawmakers Approve Historic AI Regulation Act
- The partnership includes the establishment of national AI safety institutes in both countries. These institutes will conduct joint testing exercises and consider personnel exchanges to bolster AI safety standards. Their work signifies the first agreement of its kind globally, aiming to balance AI's benefits against its potential risks.
Gina Raimondo, US commerce secretary:
“We all know AI is the defining technology of our generation. This partnership will accelerate both of our institutes’ work across the full spectrum to address the risks of our national security concerns and the concerns of our broader society.”
See: Industry Resists SEC’s Oversight on AI in Finance
Nathan Benaich, Founder of Air Street Capital (tells Sifted)
“narrow focus on extreme risk” does not “reflect the balance of opinion in the AI community” and could concentrate power in the hands of a small number of big companies.
Recognized as a Top 5 AI Hub Globally, What About Canada?
Why This Matters
The US-UK partnership on AI safety and innovation aims to create secure and ethical AI frameworks for responsible technological advancement but also set benchmarks for global cooperation. Canada's significant contributions to AI, through its pioneering researchers and institutes, accentuate the need for an inclusive approach that leverages global expertise to tackle AI's multifaceted challenges.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
 |  |  |
|---|---|---|
 |  |  |
WonderFi Faces Leadership Challenge in Boardroom Battle
Crypto | April 1, 2024
Image: Freepik
Activist investor Adam Arviv aims to revitalize WonderFi with a fresh board of directors
Adam Arviv, through KAOS Capital Ltd., has announced intentions to nominate a new slate of directors for WonderFi Technologies Inc., a leading Canadian crypto exchange. This decision stems from dissatisfaction with the current board's management and the company's underwhelming stock performance, despite the booming crypto market. With the annual general meeting on the horizon, this development could be a turning point for WonderFi.
See: WonderFi Announces Impressive Jan 2024 Growth Update
- KAOS Capital, representing approximately 22% of WonderFi's shares, has expressed significant discontent with the current board's inability to capitalize on the crypto market's growth, leading to a proposal to nominate five experienced individuals to the board.
- Despite being the only fully regulated crypto exchange in Canada, WonderFi's performance has lagged behind peers. The company's stock has underperformed in comparison to other public securities in the global crypto space, highlighting a missed opportunity during the cryptocurrency bull run. The company's lack of a coherent product strategy and fragmented brand positioning has eroded investor confidence, contributing to its stock trading significantly below its intrinsic value. Past acquisitions have been poorly integrated, leading to market confusion and a dilution of shareholder value.
- WonderFi has seen significant leadership changes over the past two years, including the departure of key executives, which has raised concerns about the company's strategic direction and governance practices.
See: Tax Tips for Canadian Crypto Users in 2024
- WonderFi's current board acknowledges nomination notice of five new directors while accusing significant shareholder Mogo Inc. of attempting to gain control of WonderFi without offering a fair premium to other shareholders. This accusation stems from Mogo's support for the KAOS nominees, a move perceived as part of a long-term strategy to consolidate control over WonderFi and its valuable assets. The company's board views this coordinated action with skepticism, interpreting it as a continuation of Mogo's years-long ambition to dominate WonderFi and its predecessor, Coinsquare, on unfavorable terms to the wider shareholder community.
Why This Matters
The unfolding boardroom drama at WonderFi is a power struggle that could redefine the company's future direction and highlights the difficult balance between shareholder activism, corporate governance, and the pursuit of value creation and profit in a sector that's showing signs of major growth potential.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
| | |
|---|---|---|
| | |
Can Canada Harvest the Next Wave of Productivity Growth?
Productivity | March 29, 2024
Image: McKinsey, Investing in Productivity Growth (Exhibit 5)
Global Productivity Grew Sixfold in 3 Decades but Advanced Economies Have Slowed
According to a McKinsey & Company analysis, the next wave of global productivity and economic growth is within reach, yet countries need to invest in productivity to harvest it or be left behind especially when faced with challenges like aging populations, the energy transition, and supply chain reconfigurations. The median economy's productivity has surged sixfold over the past 25 years, with 30 emerging economies experiencing rapid improvements. Yet, advanced economies have seen a slowdown, with productivity growth decelerating by about one percentage point since the global financial crisis.
High investment rates, ranging from 20 to 40 percent of GDP in fast-lane economies like China and India, have supported urbanization, higher productivity in service sectors, and globally connected manufacturing.
See: Canada’s Lagging AI Adoption Needs to Accelerate to Compete
For advanced economies, regaining pre-crisis productivity growth rates could yield an incremental GDP per capita increase of $1,500 to $8,000 by 2030. Directed investments in digitization, automation, and artificial intelligence could reignite productivity growth.
Harnessing the Next Wave of Productivity Growth Should Be Canada's Top Priority
Image: OECD, Business Investment Canada vs OECD Average 1980-2019
Canada's productivity landscape is currently facing significant challenges and opportunities for improvement. According to a detailed analysis by the Bank of Canada, several key factors are identified as crucial for enhancing the nation's productivity:
For Canada to drive greater innovation and efficiency, especially among small and medium-sized enterprises (SMEs), a more competitive business landscape is essential. SMEs often lack the economies of scale that benefit larger companies, making it crucial to foster an environment that supports their growth and innovation capabilities. Many innovation groups and experts have talked about Canada's lack of business investment and outdated policies for moderns times in a knowledge-based economy where intangible assets require investing in intellectual property ownership to capture value at scale.
See: C.D.Howe Report: Canada’s Weak Business Investment Threatens Prosperity
One of the most critical areas of concern is Canada's investment levels in machinery, equipment, and intellectual property. Over the past decade, investment levels have not only been insufficient but have also seen a decline. Boosting investment in these vital areas is imperative for enhancing productivity and, consequently, economic growth and wages without resorting to high inflation.
Ways to Boost Canada's Lagging Productivity
- The adoption of digital technologies, artificial intelligence (AI), and automation has significantly increased productivity in various sectors by optimizing operations, reducing errors, and enabling innovation. "Canadian's need to take more risks"
- Education and continuous skill development tailored to the evolving job market demands ensure that the workforce remains competitive, adaptable, and productive. This requires investing in human capital.
- Investments in infrastructure development, including transportation, digital connectivity, and utilities, facilitate smoother operations for businesses and contribute to economic efficiency.
See: CIC Launch Delayed Impacting Innovation Funding Landscape
- A strong focus on research and development (R&D) across industries fosters innovation, leading to new products, services, and processes that drive productivity growth. Investing in new technologies and education can avoid outdated practices, inefficiencies, and a workforce that is not equipped with the necessary skills for modern challenges. While technology can greatly enhance productivity, it can also lead to displacement of workers. Without adequate retraining and transition mechanisms, this can temporarily reduce productivity as sectors adjust to new technologies.
- Open trade policies and globalization have historically contributed to productivity growth by optimizing supply chains, enabling access to larger markets, and fostering competition and innovation.
- Avoid Regulatory and Bureaucratic Inefficiencies. Overly complex regulations and bureaucratic processes can hinder business operations, slow down innovation, and deter investment, negatively impacting productivity.
- Income Inequality and Access to Opportunities. Significant disparities in income and access to education and technology can limit productivity growth by not fully utilizing the potential of the entire population.
A few links you make like:
- AI’s Impact on Competition: Bureau Calls for Insights
- BoE Report: Open Banking Boosts Productivity, Competition
- DoF Consultation: Financial Competition in Canada
- Global Competition Review: Key FDI Trends
- Vass Bednar: Canada’s Glaring Banking Protections Gap and Implications for Consumers and Fintechs
- NCFA Letter to Ontario Economic Development on Burden (Jan 2019)
- [Report] A New North Star: Canadian Competitiveness in an Intangibles Economy
- Getting tangible about intangibles: The future of growth and productivity?
These insights and trends highlight the complex interplay of factors that influence productivity. Addressing the challenges while leveraging the positive trends requires coordinated policy efforts, strategic investments, and a focus on inclusive growth that ensures the benefits of increased productivity are widely shared.
Conclusion
Global productivity has seen remarkable growth, yet advanced economies are experiencing a slowdown. Directing investments towards digitization, automation, artificial intelligence, and crucially, human capital, nations can reignite productivity growth. For Canada, addressing its lagging productivity through increased investment in new technologies, machinery, and intellectual property, alongside fostering a competitive business landscape and reducing regulatory inefficiencies, is not just an economic necessity for sustainable growth and living standards.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
| | |
|---|---|---|
| | |
Sam Bankman-Fried Sentenced to 25 Years for Massive Fraud
SBF | March 28, 2024
Image: Unsplash/Sasun Bughdaryan
Sam Bankman-Fried (SBF) was sentenced to 25 years in prison for a massive fraud that led to the collapse of FTX, affecting hundreds of thousands of customers and shaking the confidence in the crypto markets
As widely reported (AP News, CNN), the Sam Bankman-Fried (SBF) saga, culminating in a 25-year prison sentence, marks the spectacular collapse of SBF-FTX, once a titan among crypto exchanges. The case showcased the fragile intersection of ambition, innovation, and regulation in crypto.
See: SBF Found Guilty and Convicted on All 7 Charges
SBF's journey from a crypto visionary to a convicted fraudster reveals profound lessons about the importance of ethical leadership, robust regulatory frameworks, and the need for transparency in the fintech sector. The wide-ranging reactions to his sentencing—from comparisons to other high-profile digital currency cases to discussions on legal precedents—stoke the ongoing debates about justice, accountability, and the future of crypto.
Prosecutors said in a court filing:
“The defendant victimized tens of thousands of people and companies, across several continents, over a period of multiple years. He stole money from customers who entrusted it to him; he lied to investors; he sent fabricated documents to lenders; he pumped millions of dollars in illegal donations into our political system; and he bribed foreign officials. Each of these crimes is worthy of a lengthy sentence."
Defense lawyer Marc Mukasey:
“Sam was not a ruthless financial serial killer who set out every morning to hurt people. Sam Bankman-Fried doesn’t make decisions with malice in his heart. He makes decisions with math in his head.”
Sam Bankman-Fried via BBC:
"A lot of people feel really let down. I'm sorry about that. I'm sorry about what happened at every stage."
Judge Kaplan reflecting on the sentence period:
“That there is a risk that this man will be in position to do something very bad in the future. And it’s not a trivial risk at all.” He added that it was “for the purpose of disabling him to the extent that can appropriately be done for a significant period of time.”
Reactions
The sentencing of Sam Bankman-Fried (SBF) to 25 years in prison for his role in the collapse of FTX has elicited a wide range of reactions from prominent figures and entities across the finance, technology, and legal sectors.
Comparison with Ross Ulbricht's Sentence
Several voices within the crypto community have drawn comparisons between SBF's sentence and that of Ross Ulbricht, the founder of Silk Road, who received a life sentence in 2015. This comparison has sparked debate about the consistency and fairness of sentencing in cases involving digital currencies. Bitcoin Magazine and Roger Ver, an early bitcoin investor, were among those who commented on the disparity, suggesting a discussion on the legal system's treatment of digital finance crimes.
Damian Williams, U.S. Attorney for the Southern District of New York
Williams stated that the 25-year sentence "will prevent the defendant from ever again committing fraud and is an important message to others who might be tempted to engage in financial crimes that justice will be swift, and the consequences will be severe."
See: Sam Bankman-Fried’s Parents Face Civil Charges
This reaction confirms the legal system's intent to use the case as a deterrent against future financial crimes in the burgeoning fintech and crypto sectors.
Mitchell Epner, Former Federal Prosecutor
Epner provided insight into the potential for SBF to reduce his sentence through good behavior and the First Step Act, which allows nonviolent federal inmates to reduce their sentences by as much as 50%. His comments shed light on the complexities of the U.S. penal system and sparked discussions about the appropriateness of such reductions for high-profile financial crimes.
Crypto Community and Investor Reactions
The broader crypto community and investors have expressed a range of emotions, from relief to frustration. Some see the sentencing as a necessary step towards accountability and a cleaner ecosystem, while others worry about the chilling effect it might have on innovation and the growth of the crypto market. These reactions highlight the ongoing debate within the crypto community about the balance between regulation and innovation.
Lessons Learned
The Sam Bankman-Fried (SBF) case, resulting from the collapse of FTX, offers a wealth of insights and learnings from various perspectives, including regulatory, ethical, financial, technological, and legal. Here are the top five insights and learnings:
1. Regulatory Gaps and the Need for Comprehensive Oversight
From a regulatory perspective, the case serves as a catalyst for governments and financial authorities worldwide to accelerate the development and implementation of clear, robust regulations tailored to the evolving challenges of digital finance.
See: Financial Fraud Prevention: Legal Strategies for Combatting Cybercrime and White-Collar Offenses
2. Importance of Ethical Leadership and Corporate Governance
Ethical lapses and governance failures were at the heart of FTX's downfall. The case illustrates how important ethical leadership and strong corporate governance within fintech companies is. Accountability mechanisms must be integral to a company's culture and operations, especially in sectors with rapid innovation and high risk.
3. Financial Risk Management
FTX's implosion exposed the vulnerabilities associated with the management of financial risks in digital and decentralized finance platforms. The case provides valuable lessons on the importance of robust risk management practices, including transparency with customers and investors, proper use of customer funds, and the establishment of safeguards against fraud and mismanagement.
4. Technological Trust and Security
Trust in technology is a cornerstone of the fintech and cryptocurrency sectors. The FTX case highlights the consequences of eroding that trust through mismanagement and fraud. Busiesses need continuous investment in security measures, technological infrastructure, and transparent operations to build and maintain trust among users and investors.
5. Legal Implications and Accountability
The legal proceedings and sentencing of Sam Bankman-Fried have set precedents regarding accountability in the fintech sector. It demonstrates that founders and executives of fintech companies are subject to the same legal standards as those in traditional financial sectors.
See: U.S. Court Orders Binance CZ to Surrender Canadian Passport
It also sheds light on the complexities of prosecuting financial crimes in the digital age, including challenges related to jurisdiction, digital asset recovery, and the application of existing financial laws to new technologies.
Why This Matters
As the industry moves forward, there is a critical need for enhanced regulatory frameworks, ethical stewardship, and transparent operations to safeguard the ecosystem's integrity and investor trust. The reactions and discussions SBFs case sparked among regulators, industry leaders, and the global community highlight an inflection point: the path towards a more secure and accountable digital finance future is both necessary and inevitable.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
| | |
|---|---|---|
| | |
The Ripple Effect of CBDCs on Bank Lending and Profitability
Report | March 25, 2024
Image: BoC Staff Working Report, CBDC: Banking and Anonymity
BoC Staff Paper Explores the Delicate Balance Between CBDC and Bank Lending
The Bank of Canada published a working staff paper on March 22, 2024 called 'CBDC: Banking and Anonymity' that outlines the intricacies of CBDCs and their impact on traditional bank lending and financial stability.
See: CBDCs in Canada and Impact Drivers on Banking Choices
The Bank of Canada's study exams how the design of CBDCs, particularly the degree of user anonymity they afford, could influence banking practices, credit allocation, and bank profitability.
The Anonymity Conundrum
When a CBDC offered by the central bank keeps who uses it somewhat secret, it changes how businesses act and how banks decide to give out loans. If the CBDC is a little bit private (modest level of anonymity), it might cause some issues. For example, both successful and less successful business owners might choose to use this digital money, leading banks to lend money without being as careful about who gets it.
The best level of privacy for this digital money depends on how it can help businesses. If the benefits are more like using cash, it should be more private. If the benefits are more like putting money in a bank, it should be less private.
Risks of Bank Disintermediation
The potential for CBDCs to substitute traditional bank deposits threatens to undermine the deposit-lending function of banks. This shift could curtail banks' lending abilities, thereby impacting their profit margins and stability.
See: Republican Senators Move to Block CBDCs in U.S. (again)
Initial evidence suggests that the announcement of CBDC initiatives negatively affects bank stock prices, particularly those heavily reliant on deposit funding. This market response reflects concerns over banks' future lending capabilities and overall profitability in a CBDC-dominated financial landscape.
Theoretical models indicate that CBDCs could exacerbate bank failure risks under certain conditions. When banks decide to pay more interest on the money people save with them, they often charge more for loans to make up for this. Also, when borrowers take bigger risks because they think they won't face the consequences, it can make loans riskier. Both factors can affect how risky a loan is and, in turn, how much profit a bank can make. Banks have to balance making loans available without taking on too much risk.
Outlook
The implementation CBDCs into the financial ecosystem is a double-edged sword, offering unprecedented opportunities for efficiency and inclusivity while posing significant challenges to traditional banking models, and let's not forget privacy.
See: Bank of Canada Publishes Staff Paper on ‘Unmet Payment Needs and CBDCs
Central banks must consider nuanced effects of CBDC design and their impact on traditional banking structures and lending practices as they look towards the future of banking and monetary policy.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
| | |
|---|---|---|
| | |
Vitalik Buterin Introduces Rainbow Staking at ETHTaipei
Innovation | March 22, 2024
Image: Rug Radio/Decrypt. Vitalik Buterin at ETH Taipei 2024
Vitalik Buterin latest thoughts from ETHTaipei's conference hackathon yesterday including Rainbow Staking and Layer 2 Usage post Dencun update
Yesterday at ETHTaipei's conference hackathon, Vitalik Buterin, Ethereum's co-founder, shared his latest thoughts and introduced "Rainbow Staking" as a way to combat growing centralization concerns around staking.
See: SG Launches First Digital Green Bond on Ethereum
He also talked about the surprisingly low Layer 2 (L2) usage since the Dencun upgrade, sparking discussions on the future of Ethereum's scalability and decentralization.
Rainbow Staking
- Today, solo stakers must contribute 32 ETH to become network validators or they can opt to delegate their tokens to third party staking solution providers, and as such liquid staking solutions such as Lido, dominate the market with 61.36% share posing a centralization risk to Ethereum's decentralized ethos.
- Rainbow Staking would be a mechanism designed to encourage more solo stakers by making the process more accessible and economically viable, despite the technical and financial barriers. It would distinguish between "heavy" and "light" staking, with the former being slashable and the latter participating through a lottery system. This dual approach aims to enhance network security by leveraging the strengths of both staking methods.
See: Vitalik Buterin on Crypto Stagnation & AI Risks
- Buterin acknowledged that Rainbow Staking raises philosophical questions about incentivizing participation in network security and that that concept needed more research and development.
Layer 2 Usage Post-Dencun: Below Expectations
- Despite the successful implementation of the Dencun upgrade, which introduced blobs to reduce L2 gas fees significantly, Buterin noted that the actual usage of L2 networks has been lower than anticipated.
- Although L2 networks have seen an increase in transaction volume, the expected surge in usage has not materialized. This discrepancy suggests that the full potential of L2 networks in enhancing Ethereum's scalability and reducing costs is yet to be realized.
- Ethereum core developers remain optimistic about the future integration of L2 solutions and the eventual increase in blob usage. The current low gas fees on L2 networks offer an opportunity for growth, with expectations of rising demand and transaction costs as more networks adopt Dencun.
Why This Matters
The developments in Rainbow Staking and L2 usage are key towards solving the blockchain trilemma of achieving scalability, security, and decentralization, and for Ethereum to maintain its market dominance amidst growing competition from Solona, Avalanche, Binance Smart chain and others.
See: BRICS Announces Launch of Blockchain Payment System
By lowering costs and increasing speed through L2 integration, Ethereum aims to retain and attract users looking for efficient and affordable blockchain solutions.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
| | |
|---|---|---|
| | |
BlackRock Launches New Fund on Ethereum, Bullish on Tokenization
Investing | March 21, 2024
Image: Freepik/master1305
BlackRock's Next Step: Dives into Asset Tokenization
BlackRock, the world's largest asset manager with $10 trilion in assets under management, has filed Form D with with the SEC for a soon to be launched USD Institutional Digital Liquidity Fund, its first tokenized asset fund, aiming to redefine investment strategies while offering unprecedented liquidity and efficiency to investors worldwide. Citigroup has estimated that the tokenized market could expand to $5 trillion. Traditional investments such as bonds and funds are increasingly being tokenized highlighting the vast potential for growth in this sector. BlackRock's entry into asset tokenization is expected to bridge the gap between digital assets and traditional finance, offering new opportunities for yield.
- The fund will be tokenized using an ERC-20 token named BUIDL, and will be fully backed by cash, U.S. Treasury bills, and repurchase agreements. It promises daily yield payouts via blockchain to token holders, a leap in asset liquidity and management. The fund received a significant transfer of $100 million on March 4, indicating strong backing and potential growth.
- The fund, created under the jurisdiction of the British Virgin Islands, requires a minimum investment of $100,000. The fund's size is listed as "indefinite," with $525,000 in sales commissions reported.
See: Fast Company Survey Finds Capitalism at Crossroads
- BlackRock has partnered with Securitize who will act as the transfer agent and tokenization platform, and BNY Mellon will serve as the custodian of the fund's assets. Terms of the deal remain undisclosed.
- Regulatory clarity and compliance remain major hurdles. BlackRock's participation could pave the way for regulatory clarity to ensure safe and stable digital asset transactions.
Outlook
BlackRock's strategic dive into asset tokenization through its partnership with Securitize and the launch of a digital liquidity fund on the Ethereum network is a glimpse into the future of investment and asset management, setting a new standard for transparency, efficiency, and liquidity in the digital age.
NEW: 🇺🇸BlackRock just filed with the SEC to launch tokenisation fund.
BlackRock CEO Larry Fink: ‘…the next step is the tokenisation of financial assets, and that means every stock, every bond…’ pic.twitter.com/aZmQTINNMR
— Radar🚨 (@RadarHits) March 20, 2024
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
| | |
|---|---|---|
| | |
