EDX Markets Collects TradFi Interest In Crypto; Feds Target Darknet’s Digital Currency

TradFi backing crypto

Calling itself a “first-of-its-kind digital asset marketplace designed to enable safe and compliant trading of digital assets through trusted intermediaries,” EDX Markets launched yesterday with backing from a number of traditional finance (TradFi) players such as Charles Schwab, Citadel Securities and Fidelity Digital Assets. Read the release.

Is this another Bakkt, which is backed by the New York Stock Exchange’s parent, ICE?

The Wall Street Journal breaks down the new entrant: “One major difference: EDX is a ‘noncustodial’ exchange, meaning it doesn’t directly handle its customers’ digital assets. Instead, EDX runs a marketplace where firms agree to execute trades of coins and dollars, using its platform to agree on prices. Then the firms move crypto and cash between each other to settle the trades. Later this year, EDX plans to launch a clearinghouse to facilitate the process of settling trades, but even then…” Read more.

Collins Belton of Brookwood P.C. commented on Twitter about the announcement, “Not surprising but a few takeaways: 1. Recreates exchange / broker split of TradFi. Good for mitigating risk of customer funds abuse; but arguably some needless intermediation + higher fees…” Read the others.

the congressional roadblock

The Block reports on new analysis from research firm Moody’s about digital assets prospects – or the lack thereof – in the United States. “Moody’s analysts warned that the [Rep. Patrick McHenry (R, NC) stablecoin] draft could possibly bring more regulatory arbitrage and harm consumers. Under the draft framework, the Federal Reserve would not be the primary supervisor of stablecoin issuers, and state regulators would supervise issuers…” reports the Block. In general, Moody’s appears to believe the United States will suffer due to a lack of a pathway for investment by investors large and small. Read more.

tokenization use case

Wall Street research firm Bernstein is singing the praises of tokenization where the blockchain meets real-world assets. CoinDesk reports, “Bernstein estimates that the size of the tokenization opportunity could be as much as $5 trillion over the next five years, led by stablecoins and central bank digital currencies (CBDC), private market funds, securities and real estate.” Read more.

Fed speak today

Federal Reserve Chairman Jerome Powell will testify in front of the House Financial Services (HFS)  Committee in a hearing titled, “The Federal Reserve;s Semi-Annual Monetary Policy Report” beginning at 10 a.m. ET. Video will be here.

The Committee Memorandum notes that the hearing is a requirement laid out for the Fed in the “Humphrey-Hawkins Act” in the 70s. No doubt digital assets and Central Bank Digital Currencies (CBDCs) will come up under “Special Topics.” Get the memo (PDF).

One would suspect the Fed’s role in or opinion on the new HFS stablecoin and/or market structure drafts could come up along with “Choke Point 2.0” suspicions stoked by the Fed’s past statements (such as Jan. 3, “Crypto-Assets: Joint Statement on Crypto-Asset Risks to Banking Organizations“) in concert with the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of The Currency (OCC).

digital currency darknet

The new “Darknet Marketplace and Digital Currency Crimes Task Force” was rolled out last Thursday by five federal agencies – the IRS, Homeland Security, U.S. Attorneys, the U.S. Drug Enforcement Administration and the U.S. Postal Inspection Service – as the underbelly of the digital economy gets more scrutiny.

The press release reads, “Over the last several years, federal partners have seen an increase in the use of the internet to facilitate the illegal sale and distribution of narcotics, firearms and parts, technologies, personally identifying information and other contraband. Additionally, the use of digital currency to facilitate these activities has risen.” Read it.

And, CoinTelegraph offers an overview here.

still more tips

Japan’s Crypto Exchanges Are Pushing for Looser Margin Trading Rules to Help the Sector Grow – Bloomberg

Deutsche Bank seeks crypto custody license approval in Germany – Blockworks

Fortnite’s Collab With Nike’s NFT Platform Doesn’t Include In-Game NFTs – Decrypt

Crypto hack alarms ramp up as authorities crack down after $3.7 billion stolen – The Hill

“Fed discloses payments players … Among the firms with a pending application: the crypto exchange operator Kraken.” – Politico

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