/biz/ - Business & Finance

ok

Bullish for avax

>p3
In order to retain Group 1 classification, it needs to be demonstrated that the tokenised traditional asset, or stablecoin, closely and accurately tracks the value of the real asset that it is representing.
Banks will require a mechanism that actively monitors and reports the price of a stable or traditional asset "on a daily basis" and stays within 10BP of the underlying asset.

What sort of mechanism or technology would effectively track the price of a tokenised asset against the price of its equivalent off-chain asset?

>p4
So far no crypto assets on permissionless blockchains would quality for Group 1 treatment. The BIS is seeking feedback on this matter, including what changes to the assessment regime would have to be made for permissionless crypto assets to receive Group 1 classification.

>p8
In order to be classified as Group 1 and not subject to the limitations of Group 2 (most notably, that only 1% of Tier 1 funding at the bank is allowed to be invested in Group 2, whereas Group 1 is uncapped) the Group 1 asset must be able to demonstrate;
>a mechanism that is effective at all times in linking its value to a traditional asset

>p9
>The stabilisation mechanism is designed to minimise fluctuations in the market value of the cryptoassets relative to the peg value. In order to satisfy the “effective at all times” condition, banks must have a monitoring framework in place verifying that the stabilisation mechanism is functioning as intended.

What, technologically, would constitute a "monitoring framework" for assessing the value of a tokenised asset against the value of its underlying asset?

>p10
What technology would you use to do this?

>>50090771
they could run a node on the stablecoins chain. they could have a server that requests data from one of the stablecoin chain nodes
they could ask one of the MANY oracle service providers as a last resort

whatever the framework is, LINK is not worth 6 billion dollars

>>50090803
impossible to say

Group 2 cryptoassets (everything that isn't a tokenised traditional asset, or a specific type of stablecoin, ie: Every permissionless crypto we use today) will themselves be broken into two categories, with 2a being high MC, high liquidity cryptoassets that also have an ETF referring directly to them (not in a basket).
This suggests that a privileged class of high value, high volume cryptoassets will all have dedicated ETFs.

Group 2b cryptoassets will be subject to 1250% risk weight, essentially meaning that banks will have to hold $1 of low risk capital for every $1 of Group 2b cryptoassets.

Group 2b assets aren't considered legitimate collateral and will be subject to a 25% haircut when securing value

So to take all of this information together, we can take the following information from this consultation document:

Cryptoassets are broken up into two categories and four subcategories: Group 1a, 1b, 2a and 2b. Group 1 cryptoassets are not subject to exposure limits, whereas Group 2 cryptoassets can only constitute ≤1% of the bank's Tier 1 holdings.

>Group 1a are tokenised versions of traditional assets
So far none of these currently exist, they will likely be implemented by large financial institutions or government bodies. Banks will be required to demonstrate, on an ongoing basis, that the value of the the tokenised asset tracks closely with the value of the on chain representation. Consider what technology will be used to achieve this.
>Group 1b are a limited class of stablecoins
Again, banks will be required to demonstrate, on an ongoing basis, that the cryptoasset and the "real" asset maintain close price parity. Again, consider what technology might be used to achieve this.

>Group 2a applies to high Market Cap, high volume cryptoassets that have an ETF that references them directly.
This suggests that "blue chip" permissionless cryptocurrencies will, in time, all have an ETF that refers to them specifically, which is big news in itself given that, at time of publication, Bitcoin doesn't even have an ETF yet. These "blue chip" cryptos will have a lot more capability and freer rules for bank investment than Group 2b
>Group 2b is "the rest", and currently covers every cryptocurrency that is in use today
These assets are subject to extremely stringent rules in terms of collateral, with such a high risk weight that a bank must hold $1 in lowest risk capital for every $1 of 2b cryptoasset in their possession. They have severely limited use in collateral and lending, and are generally structured in a way that would prevent any but the most enthusiastic of banks from taking them on.

Interesting

>>50091180
>>Group 1a are tokenised versions of traditional assets
So far none of these currently exist, they will likely be implemented by large financial institutions or government bodies. Banks will be required to demonstrate, on an ongoing basis, that the value of the the tokenised asset tracks closely with the value of the on chain representation. Consider what technology will be used to achieve this.

Token not needed.

>>50091180
>they will likely be implemented by large financial institutions or government bodies

Funnily enough, Red Belly Blockchain is launching in partnership with the Australian government and an unnamed bank.

>>50091180
> they will likely be implemented by large financial institutions or government bodies

Funnily enough, Red Belly Blockchain is launching in partnership with the Australian government and an unnamed bank.

>>50091297
Apologies for the double post, shitty internet.

>>50090596
>>50090739
Holy fuck [REDACTED] bros we are actually and unironically going to make it

Bullish for [raiblocks]

>>50090828
What about in regards to tokenised assets that aren't stablecoins? What sort of mechanism would you use to report price and monitor disparities?

>>50091180
>Group 2b is "the rest", and currently covers every cryptocurrency that is in use today

How many will be deemed blue chips and get an ETF? Only BTC and ETH?

>>50091928
They will use [REDACTED]

>>50092364
The minimum requirements will be >$10B market cap and >$50m daily trade with "major fiat currencies" over a year, but that's not to say every project that hits those milestones will get one, see here:
>>50090889

>>50092413
isn't it amazing how you can keep it all under their noses when you use a bit of subtlety

>it's obviously about Chainlink
>le subtle shilling
literally XRP-tier shitposting

>>50092552
there is fucking tons of information ITT that has nothing to do with that project, although some aspects relate to it.
You don't think BIS consultations on banks holding cryptoassets isn't relevant to the entire space?

>>50090596
>What sort of mechanism or technology would effectively track the price of a tokenised asset against the price of its equivalent off-chain asset?

chainlink, but LINK isn't a tokenised traditional asset, thus chainlink can't track it, thus regulations on banks can't proceed. it's a catch 22

>>50093913
oh no no no linkbros the ironing is too much

>>50094250
Basel and redpilled, all three of those pillars could be related to Proof of Reserve