The most significant crypto partnerships forged in 2023
A range of traditional finance firms entering the crypto space have done so in recent months via link-ups with sector companies
Galaxy head of firmwide research Alex Thorn | DAS 2022 New York by Blockworks
Crypto partnerships continued in 2023 as companies sought to expand geographically, add capabilities or reach new audiences.
Others ended amid regulation-related concerns.
There were a range of collaborations, as some featured only crypto firms. Others involved a traditional finance player looking to get more involved in the segment by partnering with a more specialized company — a growing trend in recent months.
Traditional players wade deeper into space
More traditional financial institutions entered the crypto and blockchain segments via link-ups with segment firms, noted Alex Thorn, head of research at Galaxy Digital.
“It’s clear they increasingly understand the utility of distributed ledger technology at a minimum, and increasingly of public blockchains themselves,” Thorn said of such companies.
Traditional finance giant Deutsche Bank, for example, said in September it was looking to build digital asset custody and tokenization services through a new partnership with Switzerland-based crypto infrastructure provider Taurus.
More recently, asset manager DWS said it would collaborate with crypto firm Galaxy and trading specialist Flow Traders to introduce a stablecoin.
Switzerland-based St. Galler Kantonalbank launched crypto custody and trading services by teaming up with AMINA Bank (formerly known as SEBA Bank).
Caspar Sauter, co-founder of decentralized exchange D8X, previously told Blockworks he expects more traditional banks to start offering crypto-related services by leveraging services by AMINA, Sygnum Bank, AlphaPoint and others.
“Particularly in jurisdictions where progressive and clear regulatory frameworks are emerging, traditional institutions are beginning to deploy the technology,” Thorn told Blockworks.
Austria-headquartered Raiffeisen Bank is reportedly getting set to offer crypto trading to retail customers after signing a letter of intent to collaborate with crypto platform Bitpanda earlier this year.
Ilya Volkov, CEO of crypto platform YouHodler, called the move another “bold and very important trend” of partnerships between traditional banks and crypto companies.
“[It’s] an absolutely logical step for traditional giants not to spend years and billions on the development of the technology and infrastructure, but instead partner with someone who has already built, tested and polished them during the last five to seven years,” he added. “This is a real step to mass adoption.”
Mainstream tech companies have also been a part of crypto-centric deals.
Immutable partnered with Amazon Web Services (AWS) to streamline blockchain gaming infrastructure for developers, while Samsung Electronics and the Bank of Korea are together exploring offline CBDC technology.
Link-ups involving stablecoin issuer Circle
Stablecoin issuer Circle was busy in 2023.
The company had partnered with Visa in December 2020. Visa revealed in September it can now send USDC-denominated payouts to Worldpay and Nuvei through Visa’s Circle Account. Those merchant banks can then route these payments in USDC to their end merchants.
“I believe this collaboration indicates a significant shift in the financial industry, because it will simplify and decrease the costs of card products,” Volkov told Blockworks. “It may even unlock emerging markets currently having limited access to global systems like SWIFT.”
Circle — along with Aave Companies, Coinbase and others — were among the founding members of the Tokenized Asset Coalition, launched in September. The members “aim to bring the next trillion dollars of assets on-chain through real-world asset tokenization, education and advocacy,” according to a news release at the time.
This new organization came a few weeks after Coinbase took an equity stake in Circle as part of an arrangement that involved shuttering the governance group created five years ago to oversee USDC.
Tokyo-based financial firm SBI Holdings said in November it was partnering with Circle to circulate USDC, establish a banking relationship and promote the use of the stablecoin issuer’s Web3 services in Japan.
Even more recently, Brazil-based Nubank partnered with Circle earlier this month to extend USDC exposure to its customers in the country.
Crypto-crypto partnerships
Though an acquisition, Ripple’s buy of crypto custody firm Metaco for $250 million in May was one of the most significant collaborations of the year, Volkov argued.
Read more: The year’s most significant crypto M&A deals — and how 2024 might shape up
Combining a payment tech firm with a crypto company focused on custody could speed up the adoption of blockchain rails for global payment processing, the YouHodler CEO said.
Thorn added: “There has been some consolidation in the crypto market infrastructure ecosystem, and it’s likely that will continue or accelerate as the industry matures. This could lead to a growth in M&A transactions, venture and strategic investing, or joint ventures.”
Other partnerships worth mentioning include those between crypto exchange OKX and Polygon Labs, as well as one involving Uniswap Labs and Talos.
In the fund space more specifically, Grayscale Investments and Galaxy Digital forged partnerships in a bid to build out their crypto product lineups.
Grayscale, perhaps best known for its flagship Bitcoin Trust (GBTC), said in October it would work with index provider FTSE Russell to create indices across various crypto sectors.
Galaxy in April partnered with Germany-based DWS in an effort to boost international distribution capabilities and extend its reach in the region.
The partnership between Ark Invest and 21Shares — though formed before this year — evolved in 2023.
The two fund issuers first joined forces in 2021, filing for a spot bitcoin ETF. The SEC denied the firms’ proposed fund in March 2022 and blocked a second attempt from the companies in January. The two firms then re-filed for a bitcoin ETF in April.
As they continue to pursue a spot bitcoin ETF — and expect the SEC to rule on their proposal by Jan. 10 — the firms launched a crypto suite last month comprising futures-based funds.
Read more: Ark anticipates win in US crypto ETF battle with ‘deepest’ suite, COO says
Partnerships that ended
While some partnerships emerged or progressed, others ended.
Checkout.com stopped servicing crypto exchange Binance as a payment service provider in August — reportedly noting in letters to the company that it was cutting ties due to regulatory concerns.
Similarly, Mastercard confirmed to Blockworks that month the card pilot programs the payments giant had with Binance — located in Argentina, Brazil, Colombia and Bahrain — would end in September.
The US Department of Justice ultimately hit Binance with $4.3 billion in fines and forfeitures after the exchange pleaded guilty to operating as an unlicensed money transmitting business and failing to comply with registration requirements.
Then-CEO Changpeng Zhao pleaded guilty to violating anti-money laundering laws and agreed to step down from his chief executive post.
Binance named a new CEO and continues to operate.
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