Blockworks

Polygon has become the launch venue for a new tokenized money market fund (MMF) developed by AlloyX, with Standard Chartered Bank taking on the roles of custodian and registrar.



<a href="https://x.com/sandeepnailwal/status/1973746496668680691">Announced</a> Thursday, the partnership is designed to offer institutional investors a bridge between traditional regulated fund products and blockchain-based financial infrastructure.



At the center of the rollout is the AlloyX Real Yield Token (RYT), which represents exposure to the China Asset Management Select USD Money Market Fund. Unlike conventional shares, these tokens are issued and transacted on Polygon’s blockchain, while Standard Chartered ensures off-chain asset custody and recordkeeping.



AlloyX has integrated Chainlink’s Proof of Reserve and NAVLink to provide real-time transparency into the assets backing the token, aiming to address a common institutional concern about on-chain financial products.



AlloyX was acquired earlier this year by Hong Kong’s Solowin Holdings for $350 million, a move that reinforced its positioning as a stablecoin and tokenization provider for the Asia-Pacific market. With RYT, the company is adding an additional layer of decentralized finance mechanics, such as looping strategies on Polygon, to enhance liquidity and yield.



The project reflects a broader push toward real-world asset (RWA) tokenization, which has attracted both startups and established asset managers. Franklin Templeton and Ondo Finance, among others, have previously launched tokenized MMF structures.



AlloyX’s decision to work with Standard Chartered signals an effort to reassure institutional clients on issues of custody, compliance, and oversight, while Polygon’s low-cost settlement network provides scalability for fund transactions.



This is a developing story.



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This article was generated with the assistance of AI and reviewed by editor&nbsp;<a href="mailto:jeffrey@blockworks.co" target="_blank" rel="noreferrer noopener">Jeffrey Albus</a>&nbsp;before publication.



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Polygon

Polygon partners with AlloyX and Standard Chartered on tokenized fund

Shalini Nagarajan

Zodia Custody, a crypto subsidiary of British bank Standard Chartered, is set to roll out its crypto storage services in Hong Kong, following the region&#8217;s recent introduction of a new licensing system.&nbsp;



The expansion signifies the UK-based company&#8217;s growing presence in the Asia Pacific area.



Zodia Custody’s CEO Julian Sawyer said that Hong Kong&#8217;s crypto demand, which is primarily from institutions rather than retail users, aligns well with the firm’s offerings, CNBC <a href="https://www.cnbc.com/2023/10/30/standard-chartered-owned-crypto-firm-zodia-launches-in-hong-kong.html">reported</a> on Sunday.



Having already established operations in Singapore, Japan and Australia, Hong Kong completes the company&#8217;s expansion throughout the Asia Pacific, he said.



Blockworks has reached out to Zodia Custody for comment.



Zodia Custody is owned by Standard Chartered, Northern Trust and SBI, and is registered with regulatory authorities in the UK, Ireland and Luxembourg.



Launched in Dec. 2020, it aims to deliver crypto custody solutions for institutional and corporate clientele, tapping into the banking know-how of Standard Chartered and Northern Trust to maintain compliant digital asset management and storage.



It operates separately from Zodia Markets, a digital asset exchange and brokerage also backed by Standard Chartered.



Since Hong Kong regulators introduced their licensing program, there&#8217;s been a surge in digital asset operators, including exchanges, <a href="https://blockworks.co/news/hong-kong-crypto">looking to establish a presence</a> there.&nbsp;



Following a significant scandal involving the JPEX crypto exchange, which reportedly impacted over 2,000 individuals, Hong Kong&#8217;s central bank and securities regulator have <a href="https://blockworks.co/news/hong-kong-crypto-oversight">strengthened crypto regulations</a>.&nbsp;



The updated rules now stipulate that certain virtual currencies can only be accessed by professional investors.



Earlier this year, Bloomberg <a href="https://blockworks.co/news/hong-kong-crypto-testing-ground">reported</a> that Beijing is quietly backing Hong Kong&#8217;s efforts to emerge as a digital asset center, with officials monitoring crypto industry progress.&nbsp;



Currently, OSL Digital Securities and Hash Blockchain are the only licensed virtual asset trading platforms in Hong Kong.



Zodia Custody is said to be in talks with Hong Kong&#8217;s central bank and securities regulator about becoming regulated in the region, per CNBC.



The company intends to adopt a step-by-step approach, initially offering a select range of cryptocurrencies to clients in Hong Kong.



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Custody

StanChart’s Zodia Custody set to navigate Hong Kong’s crypto market

Standard Chartered&#8217;s crypto-focused venture, Zodia Markets, foresees significant growth in cross-border payments for 2023.



In light of this, the crypto asset brokerage intends to roll out a stablecoin-based foreign exchange (forex) market by the end of September.



“We&#8217;re seeing larger and larger corporates in more and more developed markets come to us either directly or through Standard Chartered [&#8230;] and are looking at using stablecoins for cross border payments,” Nick Philpott, co-founder at Zodia Markets, told Blockworks in an interview.



“We’re working with the issuers of a bunch of non-US dollar stablecoins starting with Canadian, Japanese, Singaporean, euro and pound sterling to try to create a stablecoin-based foreign exchange market,” he continued.



This market would operate as a platform for users to exchange one stablecoin for another, similar to traditional forex markets that deal with fiat currencies like USD, EUR and JPY.&nbsp;



“What we&#8217;re going to see is that this market is going to take off and I think a lot of traditional payment service providers are going to be left flat-footed and are going to be left behind,” Philpott said.



Earlier this month, Zodia Markets CEO Usman Ahmad <a href="https://blockworks.co/news/stanchart-crypto-stablecoin-market">said</a> he views the British pound as a strong choice among non-USD stablecoins.



The firm’s platform has already incorporated USD via Circle and <a href="https://blockworks.co/price/usdt">Tether</a> and has plans to integrate Stablecorp (CAD), Circle (EUR), Poundtoken (GBP), GMO-Z (JPY) and StraitsX (SGD). Additional integrations are in progress, according to the firm. 



“In terms of the cross-border payments, I would say that&#8217;s already started. We’re just getting on the train,” Philpott said.



While many crypto exchanges and DeFi platforms allow users to trade stablecoins like USDC, USDT or DAI, Zodia Markets&#8217; concept for a stablecoin-based foreign exchange market stands out because of its traditional institutional support.



Philpott, who developed an interest in crypto after witnessing his brother mine bitcoin, contended that Zodia Markets has formed strong partnerships with liquidity providers, and the support of Standard Chartered has boosted its credibility.



“A lot of those liquidity providers are already known to us because they work with Standard Chartered in other asset classes, so that helps, and they see what we&#8217;re trying to do,” he said.



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stablecoins

StanChart’s Zodia Markets gearing up for stablecoin forex market debut

Zodia Markets&#8217; CEO, Usman Ahmad, aims to capitalize on the growing worldwide interest in stablecoins, crypto assets anchored to stable assets such as fiat money.



Ahmad recently discussed the opportunities in the stablecoin sector and revealed that many corporate clients are showing keen interest.



“Mostly firms which are trading in multiple jurisdictions,” he <a href="https://www.fnlondon.com/articles/zodia-markets-crypto-ceo-says-stablecoins-are-like-fx-proxy-20230905?mod=topic_crypto">said</a> in a Financial News interview published Tuesday.



Ahmad noted that stablecoins act as a sort of stand-in for foreign currency, enabling people to make instant international transactions even when banks are closed.



Zodia Markets serves as a digital asset exchange and brokerage, specifically catering to institutional clients. It operates separately from Zodia Custody, a digital asset custodian service. Both entities are backed by Standard Chartered.



Ahmad observed that the stablecoin market is gaining momentum, especially in those not pegged to the US dollar. He added that about 94% of the stablecoin market is denominated in dollars.



Popular stablecoins, such as Tether (<a href="https://blockworks.co/price/usdt">USDT</a>) and USD Coin (<a href="https://blockworks.co/price/usdc">USDC</a>), are all linked to the US dollar&#8217;s value, putting them <a href="https://blockworks.co/prices">among the largest</a> crypto assets by market cap.



“We feel there is an opportunity in the non-dollar stablecoin market,” Ahmad said, highlighting British sterling-denominated stablecoins as a strong prospect.



He mentioned that some global clients have expressed frustration over banking hours affecting crypto transactions, as they have to wait for banks to reopen after weekends.



“With stablecoins, they could do that within minutes on bank holidays,” he added.



Traders and investors might look for options other than the US dollar to reduce risk, while international companies could find stablecoins pegged to currencies that better align with their global operations to be valuable.



Ahmad recognized that although stablecoins may be speedy and efficient, they don&#8217;t offer yield generation as a benefit.



For <a href="https://blockworks.co/tag/yield">yield</a>, stablecoin holders generally have to seek out opportunities in <a href="https://blockworks.co/tag/defi">DeFi</a>, potentially taking on additional risks. Updated Sep. 5, 2023 at 9:50 am ET, clarifying Zodia Markets relationship to Zodia Custody and Standard Chartered.



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StanChart crypto CEO is bullish on non-USD stablecoin market

Casey Wagner

<div id="highlights-block_6138e7082d971" class="highlights">
 <ul>
 <li>Standard Chartered’s new crypto research team is more bullish on Ethereum than bitcoin </li>
 <li>The uses cases for Ethereum are more practical than bitcoin, the bank says</li>
 </ul>
 
</div>



The new digital asset research team at Standard Chartered sees Ethereum going as high as $35,000, but only if bitcoin nears $175,000, according to a research report <a href="https://www.reuters.com/technology/standard-chartered-sees-bitcoin-hitting-100000-by-early-next-year-2021-09-08/" target="_blank" rel="noreferrer noopener">released</a> Tuesday. 



The team at Standard Chartered anticipates that bitcoin will double by the end of the year or early in 2022. The bank’s structural value for Ethereum is between $26,000 and $35,000, but only if bitcoin starts to trade at the top of their value range, which is between $50,000 and $175,000.&nbsp;



For bitcoin, &#8220;cyclically, we expect a peak around $100,000 in late 2021 or early 2022,” Geoff Kendrick, head of emerging market currency research and crypto research at Standard Chartered, said.&nbsp;



As far as the timeline for the price target, Kendrick said that bitcoin’s halving cycle, which occurs every 210,000 blocks, is a key figure to watch.&nbsp;



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“I think the main driver of the whole asset class is the cyclical nature of the halvings that happen in bitcoin supply where every four and a half years there is a halving of the number of new bitcoins issued,” Kendrick said. </blockquote>



If and when bitcoin reaches $100,000, Ethereum will increase as well, likely hitting around $15,000 by the first half of 2022, he said.&nbsp;



“To get to the bigger-picture value, like $26,000 to $35,000, we might have to wait until we get the next bitcoin cycle, which doesn&#8217;t kick in until 2024, at which time I suspect it becomes feasible for bitcoin to go to the top of the valuation range at $175,000,” said Kendrick. “If we could get to that, or there about, then I think that allows Ethereum to go towards the top of its valuation range.”



The Standard Chartered team is more bullish on Ethereum than bitcoin, Kendrick said, because the use cases for bitcoin are far more limited.&nbsp;



“Peer-to-peer electronic payments, that&#8217;s it. That&#8217;s the only use, really, for bitcoin in a practical sense, as well as its store of value,” said Kendrick.&nbsp;



Ethereum, on the other hand, can take on a more “financial market” role.&nbsp;



“ETH serves more as a facilitator of a larger software platform hosting a&nbsp; variety of decentralised applications (dApps) and contracts, which together constitute the&nbsp; Ethereum network,” the report said. “This gives rise to a much wider set of use cases.”&nbsp;



Use cases include non-fungible tokens, which have <a href="https://cms.blockworks.co/nft-craze-rages-on-as-august-sales-near-900m/" target="_blank" rel="noreferrer noopener">exploded in popularity</a> in recent months, and decentralized autonomous organizations, which have also <a href="https://cms.blockworks.co/the-future-of-daos-how-the-investment-landscape-is-evolving/" target="_blank" rel="noreferrer noopener">been on the rise</a> this year.



Regulation, particularly when it comes to classifying digital assets and tokens, poses a risk to the future growth of the market, Kendrick said. 



“There&#8217;s clearly a risk to Ethereum that at some point the SEC will view it as equivalent to equities,” said Kendrick. “That would be inverted brackets negative.”



Are you a UK or EU reader that cant get enough investor-focused content on digital assets?<a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Join us</a> in London on November 15th and 16th for the Digital Asset Summit (DAS) London. Use code ARTICLE for £75 off your ticket. <a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Buy it now</a>.

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