tehchives
commented
18 hours ago Thanks for starting a place for discussion here John - So interesting to have these large reports come out so close to each other. I'm going to need to work on my note taking and presentation skills, and learn from you!
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I hadn't realized that Tether was reportedly so heavily backed by U.S. treasuries. off topic for a moment but it puts me in mind of Japan's markets (which DTCC just partnered with for Launchpad!) and how Japan is largest foreign owner. If Yen drops (ongoing problem) and treasuries end up sold, tether could depeg, which would spiral further as other stablecoin or BTC related backings would lose value too.
"In recent years, institutional sponsorship of Bitcoin (BlackRock ETF, MicroStrategy) has been growing and crypto assets have behaved like “high beta” assets" - (111) MSTR getting direct shoutout here for their approach to investment and growth
"Structural demand for Treasuries may increase as the digital asset market cap grows, both as a hedge against downside price volatility and as an “on-chain” safe-haven asset" (111) - I find this really cute. Report is establishing that fiat, not other value mechanisms which have actual backing, are themselves backing stablecoins -> therefore adoption of tech is going to continue providing home and growth for tbills. I'm not so sure but makes sense the Treasury would express this expectation!
Diagram on 112 is simple and fantastic imo. Doesn't cover custody, but doesn't need to to be appreciated - types of assets and implied claim therein.
I also think the tokenization explainers on 113 are fantastic. "Tokenization has the potential to unlock the benefits of programmable, interoperable ledgers to a wider array of legacy financial assets", graphic to right establishing where relevant data is stored (ideally, a public read blockchain, but similar to DTCC this is unspecified) SIDEBAR- WhyDRS could use articles breaking down tokenization in a similar way, but from a custodial perspective, relating it to a title deed in a safe if holding the private key.
"The benefits of tokenization extend far beyond and are independent of native crypto assets like Bitcoin as well as the public, permissionless blockchain technology those assets have popularized" - (114) spoke too soon. Giving away the game here, aren't they? --> leads into the unified ledger section you highlighted --> must "be developed under auspice of central banks" "Cybersecurity Threats: Certain types of DLT solutions (public, permissionless blockchains) are vulnerable to hacking and other cybersecurity attacks, which could pose risks to the security of tokenized Treasuries" - (118) maybe in the case specifically of a treasury, issued by a nation state, I could appreciate the point here. Typically public permissionless is my preference.
Under concerns, they include: Increased Complexity and Opacity: − Tokenization leads to more composability, which could significantly add complexity and opacity to the financial system from new and non-traditional assets being added to the digital financial ecosystem − Improperly coded smart contracts can rapidly trigger unwanted financial transactions with unintended consequences .... which I wish had been a lot more detailed!
Page 120 is borrowed from https://www.dtcc.com/-/media/DASCPWhitePaper.pdf which I don't think I'd read before - some new homework.
Ah! Page 121 is exactly what I might have wanted from the DTCC - an explanation of blockchain structure with attached rationale. The punnet square in the corner is exactly how I've imagined and explained the 4 types of blockchains for years, so pretty cool to see it here. SIDEBAR - I also think we could use a similar page explaining exactly these items on WhyDRS, especially once seeking to have multiple blockchains relevant to not only DAO and settlement day to day but additionally in context of expected private market chains.
JFWooten4
brief outline, to be implemented:
src
from Chives 🏁
main points as fnotes (for expansion):
Banger quotes:
if you want to tackle any of these (or other ideas) @tehchives, feel free to take ownership of this
src:) it interweaves with a material personal story I'll use for the banking arguments, so I'd value handling at least the first fnote points [^hm]: this line extension is questionable, tread cautiously