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Tag: Digital Assets

Navigating the Regulatory Maze: Key Insights from the RWA London Summit

Posted on by stg3

The Surprising Truth About Digital Asset Regulation

 

The most revealing insight from the “Digital Asset Regulation: The Next Chapter” panel at the RWA London Summit wasn’t about new frameworks or compliance requirements – it was the startling admission that the entire regulatory landscape may be fundamentally misaligned with the nature of digital assets.

 

As Alex Royle, Co-founder and Chief Regulatory Officer at Core Prime, boldly stated:

 

“Regulators are going to need to start understanding that there probably needs to be a slightly different social contract that they have with investors. ” The real issue, he explained, isn’t decentralization but disintermediation – “Regulation is something that bites at the intermediary almost entirely.“

 

In a world where disintermediated finance is increasingly accessible, regulators face an uncomfortable reality: no regulatory framework can prevent retail consumers from accessing DeFi. “The internet exists,” Royle pointed out bluntly.

 

The European Experiment

 

The panel, featuring compliance and regulatory leaders from Solidus Labs, B2C2, Cor Prime, and Galaxy Digital, examined MiCA (Markets in Crypto-Assets Regulation) – the EU’s comprehensive regulatory framework – as a test case for global regulation.

 

Oumou Ba, Head of Compliance at B2C2, highlighted three key impacts of MiCA:

 

  1. Standardization of the market, boosting institutional confidence
  2. A harmonized framework across 27 EU member states
  3. Enhanced investor protection through clear rules for stablecoins and market abuse

 

However, not everyone saw MiCA as a perfect model. Royle pointed out that the EU has produced “15 to 20 times the amount of words written to explain the primary text” – indicating the challenges of implementing a fixed framework in a rapidly evolving ecosystem. “Mica is a regulation, and within pieces of Mica, it defers directly to directives,” he noted, questioning how supervisory convergence would work in practice.

 

The Prudential Regulation Gap

 

Perhaps the most significant regulatory hurdle identified by the panel – and one that’s received surprisingly little attention – is prudential regulation. This critical area determines how financial intermediaries dealing with digital assets will be held accountable by regulators.

 

“The biggest regulatory hurdle that we need to get over, we haven’t really addressed yet. That is prudential regulation,” Royle emphasized. “There’s a huge shoe to drop still as to whether or not a prudential regulator… is going to make any of these business models viable.”

 

Chris Smith from Galaxy Digital reinforced this concern: “If you’re taking a native token in a particular blockchain, a Bitcoin as collateral… it’s very punitive” under current regulatory capital requirements. This creates a significant barrier for institutional adoption.

 

Building a Global Strategy

 

When asked about developing regulatory strategies, the panelists emphasized that jurisdictional choices must follow business plans, not precede them.

 

“Finding a jurisdiction is really having a good balance between the compliance but also the business,” Ba noted. This includes considering talent availability, regulator relationships, and customer base.

 

Royle pointed out that many crypto firms lack well-considered jurisdictional marketing strategies: “There’s probably very few countries globally that actively ban activities… but that doesn’t allow you to market cross border. Where a lot of crypto firms get found out, get fined, get caught…is that they say ‘Well, I’m regulated in the UK. I’ve got an FCA license. What do you mean I can’t call someone in Australia and sell them some crypto?'”

 

The Path Forward

 

Looking ahead, the panel identified several critical developments needed to foster adoption:

 

  • Global Harmonization: Equivalence between regulatory frameworks in the UK, EU, and US is essential.

 

  • Asset Management Clarity: Regulatory certainty for asset managers would bring significant liquidity to the market.

 

  • New Regulatory Paradigm: Rather than trying to prevent access to DeFi, regulators should support regulated firms to intermediate it safely.

 

  • Industry Standards: The digital asset industry needs to mature and establish its own standards rather than waiting for regulators.

 

Delphine Forma, moderating the panel, emphasized this point: “On DeFi also as an industry, we should mature. I think the market is still very immature when we see whatever has happened during the last few months with the launch of those meme coins and insider trading going on, market manipulation. As an industry, we have this opportunity to build up standards and come up to the regulator as a growing up adult in the room.“

 

As Ba concluded, “The technology is here to help… what the technology can do in terms of compliance controls is absolutely fantastic.”

 

The Bottom Line

 

The panel made it clear that we’re at a critical juncture in digital asset regulation. Traditional regulatory approaches that rely on controlling intermediaries face fundamental challenges in a disintermediated financial system. The most successful frameworks will be those that adapt to this new reality rather than fighting against it.

 

For financial institutions exploring digital assets, understanding these regulatory dynamics isn’t just about compliance – it’s about identifying viable business models in a rapidly evolving landscape.

 

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The “Digital Asset Regulation: The Next Chapter” panel at the RWA London Summit 2025 brought together an exceptional group of regulatory experts to discuss the evolving landscape of digital asset regulation. Moderated by Delphine Forma, Policy Lead at Solidus Labs, the panel featured Oumou Ba (Head of Compliance at B2C2), Alex Royle (Co-founder and Chief Regulatory Officer at Core Prime), and Chris Smith (Chief Compliance Officer at Galaxy Digital). The RWA London Summit itself gathered over 200 senior executives from institutions including Fidelity, State Street, LSEG, and BNY Mellon to explore the future of tokenized real-world assets across seven expert panels.

Blockchain Executives Weigh In: Circle’s IPO Sparks Mixed Investment Sentiment

Posted on by stg3

April 3, 2025

 

In a recent survey conducted among our exclusive community of blockchain and Real World Asset (RWA) executives, interesting perspectives emerged regarding Circle’s upcoming initial public offering (IPO). The stablecoin giant recently filed for an IPO following a substantial $1.7 billion windfall from its stablecoin reserves.

 

Survey Results: To Invest or Not to Invest?

 

Our community poll asked a straightforward question: “Would you buy Circle following IPO?” The results revealed divided opinions among industry leaders:

 

  • 56% of respondents see tremendous growth potential, selecting “Yep, the growth opportunities are huge”
  • 44% of respondents expressed hesitation, with responses split between concerns about competition from other stablecoins and commitments to alternative investments

 

Market Context

 

Circle, the company behind the USDC stablecoin, is seeking approval to trade on the New York Stock Exchange under the symbol “CRCL.” This move comes at an interesting time for the stablecoin sector, which has seen increasing competition and regulatory scrutiny.

 

Expert Commentary and Financial Analysis

 

Several community members provided insights that help contextualize these results:

 

An industry leader (former Morgan Stanly) succinctly observed that “Yield is key” – highlighting how declining interest rates could potentially make Circle’s business model less attractive to investors. This sentiment was echoed by others who mentioned that “declining rates makes it less attractive.”

 

A particularly detailed analysis was shared by one executive from a post by @TheOneandOmsy that raised several red flags about Circle’s IPO filing:

 

  • Gross margins are declining significantly, dropping from 59.9% in 2022 to 39.3% in 2024 (a 33% decrease over two years)
  • High operational costs, with over $250 million annually in compensation and an additional $140 million in G&A expenses
  • USDC circulation showing stagnant growth (43,554 in 2022 vs 43,857 in 2024)
  • Interest rates, which drive core income, have likely peaked and are expected to decrease (with a “90% chance of 2 cuts this year”)
  • A price-to-earnings ratio of 32x for 2024 earnings is considered expensive given the company’s loss of “mini-monopoly” status and structural growth challenges
  • Regulatory concerns as the “core US market being deregulated and banks + FIs about to crash the private party”

 

The analysis concludes that the IPO “feels like a hail mary for some liquidity before the squad rolls in” – suggesting the timing may be opportunistic rather than strategic for long-term growth.

 

Looking Ahead

 

As Circle moves forward with its IPO process, these mixed sentiments from industry insiders highlight both the optimism surrounding stablecoin infrastructure and the practical concerns about yield generation in a potentially lower interest rate environment.

 

The IPO will be closely watched as a barometer for how traditional markets value crypto-native financial infrastructure companies. With Circle’s stablecoin serving as a crucial bridge between traditional and decentralized finance, its public market performance could have significant implications for the broader blockchain ecosystem.

 

This blog post is based on an internal survey of blockchain and RWA executives and represents their personal investment perspectives rather than financial advice.