Developments in Future of Money

Our survey of recent notable happenings in the world of digital assets

Cityscape of Singapore city skyline at night in Marina Bay

Compiled by the Oliver Wyman Forum

The institutionalization of digital assets took several steps forward even as continued weakness in cryptocurrency markets strained crypto exchanges, brokerages, and mining companies. These are some of the highlights of our latest review of significant developments in the future of money.

Policy Front

It’s Time for Finance to Explore Institutional DeFi

Financial institutions should actively explore ways to develop Institutional DeFi business models because of their potential to transform financial markets for the benefit of investors, issuers, and financial services providers, according to a report released on November 2 by the Oliver Wyman Forum, Singapore’s DBS, Onyx by J.P. Morgan, and Japan’s SBI Digital Asset Holdings.

Institutional DeFi combines the power and efficiency of software protocols in the DeFi ecosystem with a level of protections and controls, such as Know Your Customer procedures, that regulators demand and customers expect.

The report included lessons from a pilot project led by DBS, J.P. Morgan, and SBI, under the auspices of the Monetary Authority of Singapore, which conducted foreign exchange and government bond transactions against liquidity pools comprising tokenized Singapore government securities, Japanese government bonds, Japanese yen deposits, and Singapore dollar deposits. It called for joint action by the industry, regulators, and clients to achieve greater legal clarity, promote common industry standards, and develop incentives to encourage the adoption of Institutional DeFi.

Singapore Launches New CBDC and Tokenization Projects

The Monetary Authority of Singapore (MAS) announced the launch of new digital asset projects at the Singapore Fintech Festival, which ran from November 2 to 4.

As part of an expanded collaboration with international partners on cross-border foreign exchange (FX) settlement, the central bank is teaming up with the Banque de France, Swiss National Bank, and the Bank for International Settlements Innovation Hub to investigate the use DeFi protocols and automated market makers (AMMs) to automate FX trading and settlement using wholesale central bank digital currency (CBDC). MAS also is starting two pilot projects to explore the use of tokenization in trade finance and wealth management, with Standard Chartered leading the trade finance experiment and HSBC, United Overseas Bank, and Marketnode, a Singapore digital asset platform, collaborate on wealth management.

Separately, MAS said its Project Orchid had identified several potential use cases for a programmable CBDC, including making government payments to Singaporeans and providing aid for training programs. The central bank said it doesn’t see an urgent case for a retail CBDC but will continue its studies with the aim of building an innovative and responsible digital assets ecosystem.

Four Countries Successfully Test Cross-border CBDC Platform

Central banks of China, Hong Kong, Thailand, and the United Arab Emirates completed a successful pilot project that used a bridging platform between CBDCs to carry out cross-border transactions, the Bank for International Settlements (BIS) announced on October 26.

In the experiment, the central banks created a new blockchain, the mBridge Ledger, to execute cross-border payments in CBDC. Twenty commercial banks from the four jurisdictions took part in the pilot, in which $12 million was issued on the platform to facilitate 164 payment and foreign exchange transactions totaling more than $22 million.

The project team will continue to develop and test the technology with the aim of producing a product with enough features to be used by early adopters in the year ahead, and a production-ready system thereafter.

New York Fed Makes Progress on Cross-border CBDC Initiative

The Federal Reserve Bank of New York on November 4 announced the successful completion of the first phase of its Project Cedar, saying it demonstrated that blockchain technology could execute cross-border wholesale C BDC payments in a fast and safe manner, but that more research was needed to explore platform design and improve interoperability across different blockchain-based payment systems.

Turkey Plans to Launch a CBDC in 2023

The government of Turkey plans to introduce a CBDC next year, according to the Presidential Annual Program for 2023, which was released on October 25.

Turkey’s central bank will carry out research and development efforts and testing of a CBDC in collaboration with other banks, the program stated. The digital Turkish lira will be integrated with digital identity and the central bank’s FAST payments system.

Business Moves

Binance’s Zhao Says Exchange May Buy a Bank

The chief executive of crypto exchange Binance Holdings, who has said it may spend $1 billion on deals this year, is considering acquiring mainstream financial entities including banks, the cryptocurrency exchange’s chief executive said in an interview, Bloomberg reported on November 2.

“There are people who hold certain types of local licenses, traditional banking, payment-service providers, even banks. We’re looking at those things,” CEO Changpeng Zhao was quoted as saying at the Web Summit technology conference in Lisbon on Nov. 2. “We want to be the bridge between crypto and the traditional, financial world.”

Dogecoin Surges on Musk’s Twitter Takeover

The price of Dogecoin surged following Elon Musk’s takeover of Twitter amid speculation that Musk could integrate the meme coin as a payments vehicle on the social media website.

Dogecoin rose more than 150% between October 25, when many observers still doubted whether Musk would purchase Twitter, and November 1, four days after he closed the deal. On that day, Musk tweeted a photograph of a Shiba Inu, the dog breed that serves as the logo for Dogecoin, wearing a T-shirt with the Twitter logo. Dogecoin eased to 12.65 cents on November 2, trimming its rise to a little over 100%. That boosted its market capitalization by more than $8 billion to $16.8 billion, making it the eighth-largest cryptocurrency by market cap, according to

Musk has said Dogecoin is one of three cryptos he owns, alongside Bitcoin and Ether. It is also the only crypto his electric vehicle company, Tesla, accepts as payment.

Fidelity Prepares to Offer Retail Crypto Trading Service

Fidelity Investments, the US mutual fund company, on November 2 opened a waiting list for a new crypto trading service for retail investors.

Fidelity Crypto will enable investors to buy and sell Bitcoin and Ether. It is the latest expansion into crypto by Fidelity, which has offered institutional custody and trading services for four years and subsequently launched index funds in Bitcoin and Ether. “Where our customers invest matters more than ever,” the company said in a statement. “A meaningful portion of Fidelity customers are already interested in and own crypto.”

UBS Issues Digital Bond Accessible On- and Off-chain

The Swiss bank UBS on November 3 issued a 375 million Swiss franc (same in USD) digital bond that can be settled and cleared on either a blockchain or conventional platform.

The three-year bond has the same structure, legal status, and credit rating as the bank’s traditional unsecured notes. It was issued on Switzerland’s SIX Digital Exchange (SDX) with a dual listing on SIX Swiss Exchange. Transactions are settled on SDX’s distributed ledger-based central securities depository (CSD) through atomic settlement. Investors that don’t have blockchain infrastructure can settle and clear transactions in the bond on SIX’s conventional CSD, which is linked to the SDX CSD. The arrangement “removes a hurdle on the way to adopt new disruptive technology that can make issuing bonds faster, more efficient and simpler,” the bank said in a press release.

Crypto Winter Hits Trading Revenues

A sharp drop in retail transaction revenue revenue pushed Coinbase into the red in the third quarter, the largest publicly listed crypto exchange reported on November 3.

Retail transaction revenue was $346 million in the quarter, down 44% from the preceding period and off 66% from the same period a year earlier. Monthly transacting users fell 6% quarter over quarter, to 8.5 million. Overall revenue fell 53% from a year earlier and the company posted a net loss of $545 million, compared with a profit of $406 million a year earlier.

Macro headwinds, a shift in investor behavior to “hodl’ing” from trading, and a shift in trading volume away from the United States because of uncertainty about the development of a US regulatory framework contributed to the weaker results, Coinbase said.

Separately, the US online brokerage Robinhood reported on November 2 that revenue from cryptocurrency trading declined 12% in the third quarter from the second, to $51 million.

Crypto Mining Firms Continue to Struggle

Nasdaq-listed Iris Energy Ltd., an operator of Bitcoin mining data centers, disclosed on November 2 that miners it owned through two special purpose vehicles were in talks with lenders to renegotiate $103 million in debt and could default if no agreement is reached by November 8. The miners’ monthly gross profit is less than a third of their debt service obligations.

Blue Safari Group, a special purpose acquisition company, filed for a new extension of its agreement to buy crypto miner Bitdeer at a $4 billion valuation, Decrypt reported on November 2. It was the third extension the SPAC has sought in the past six months, and it could last for up to one year.


Institutional Investors Continue to Warm to Digital Assets

Institutional investor sentiment toward digital assets continued to improve over the past year despite market headwinds, and 81% of them believe digital assets should be part of a portfolio, according to the latest annual survey by Fidelity Digital Assets. 

Fifty-one percent of European respondents to the survey said they had a positive perception of digital assets, up from 45% in 2021, while positivity among US respondents rose to 39% from 29%. Positive perceptions among Asian respondents dipped by three percentage points, to 60%. Among European institutional investors, 86% say digital assets should be part of a portfolio, compared with 84% of Asian investors and 74% of Americans.

The percentage of investors planning to buy or invest in digital assets in the future rose to 74% globally, up three points from 2021. US high-net-worth investors showed the biggest jump in investing intentions, to 74% from 31% last year.