🤝 The DTCC Made a Purchase: Securrency

👋 Welcome to a New Entrant: 21x and Polygon

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Goooood Morning, Rainmakers! ☀️

A special welcome to our newest Rainmakers that have joined us from the TokenizeThis conference, welcome to the What’s Drippin’ family 🌴

As always, we have two captivating topics for you to dive into:

1️⃣ 🤝 The DTCC Made a Purchase: Securrency

2️⃣ 👋 Welcome to a New Entrant: 21x and Polygon

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🤝 The DTCC Made a Purchase: Securrency

Major congratulations are in order for a fellow tokenization company we’ve known for a while now, Securrency, which has just received a signed definitive agreement for acquisition from the Depository Trust and Clearing Corporation (DTCC)! 👏

Excited Cheering GIF by Aminé

For those not familiar, the DTCC is the premier post-trade infrastructure for clearing, settlement, asset servicing, transaction processing, trade reporting and data services across asset classes. To put them into perspective in 2022, DTCC’s subsidiaries processed securities transactions valued at U.S. $2.5 quadrillion and its depository subsidiary provided custody and asset servicing for securities issues from over 150 countries and territories valued at U.S. $72 trillion… those are some hefty numbers!

So now that we understand the magnitude of the DTCC, what does this mean for Securrency and where will this acquisition take tokenization?

Well for starters, Securrency will be rebranded to be DTCC Digital Assets and Securrency CEO Nadine Chakar will join the DTCC as Managing Director, Global Head of DTCC Digital Assets. She’s not alone though, other executives and about 100 Securrency staff will also be joining the DTCC.

In terms of what it means for future initiatives, the DTCC carries weight both from how involved they are in the financial system and as a beacon of compliance. Now having Securrency’s technology under their roof, one can expect the DTCC to accelerate tokenization adoption by enhancing their existing services and licensing it to push risk-averse institutions over the hump via their credibility.

We look forward to building on our past work to drive consensus around the standards, controls and frameworks necessary to support regulatory-compliant digital asset solutions and development of the right architecture and infrastructure to ensure widespread interoperability

Frank La Salla, President, CEO and Director, DTCC

Keyword: Interoperability.

This was a theme brought up time and time again during the TokenizeThis conference, starting with the “Solving the Liquidity Problem” panel. The idea being that we can’t fragment liquidity whether by marketplace, by blockchain, or otherwise if we want this industry to grow. DTCC is going to play a crucial role in making this happen and the Securrency acquisition is going to help accelerate that. Congratulations to the teams on both sides!

👋 Welcome to a New Entrant: 21x and Polygon

We’re excited to hear another marketplace is entering the tokenization space: 21X. Founded earlier this year, 21X is a part of 21 Finance which started back in 2017 offering digital and regulated software solutions. As their own platform, 21X is going to be regulated by the European Securities and Markets Authority (ESMA) via the EU DLT Pilot Regime (DLTR).

In the meantime, they’re building market infrastructure for security tokens on Polygon PoS which will enable smart contract-based trading and settlement of tokenized stocks, bonds, and fund instruments. This means that 21X and Polygon will be able to take full advantage of blockchain technology thanks to DLTR, therefore eliminating the need for intermediaries which hasn’t always been available due to regulatory uncertainty.

What does Polygon’s track record look like?

They’ve been working with various groups across the tokenization industry including Securitize, Tokeny, Taurus, INX, and others with issuances including Hamilton Lane alternative investment products, bonds from ABN AMRO and Siemens, and Franklin Templeton’s BENJI token which started on Stellar. One of Polygon’s value propositions as an L2 is to enable security tokens to easily interact with the DeFi ecosystem.

Fully on-chain exchanges like 21X have a truly disruptive potential for nearly every sector in traditional finance. 21X's approach, working directly with regulators to build a fully compliant securities trading venue, changes the game in terms of what's possible. When you combine this with the Polygon protocols' scalability and security, it's clear the future holds countless innovative applications that will change the way we think about tokenized assets on a decentralized blockchain.

Colin Butler, Global Head of Institutional Capital at Polygon Labs

Congratulations to 21X, I wish them luck in passing any pending regulatory checks to become fully regulated and applaud Polygon Labs for enabling them to continue their on-chain journey with their capabilities!

Want to hear more from Colin on Polygon? Check out the RWA Blockchain Adoption Panel recording from the TokenizeThis conference where he spoke alongside other leading tokenization blockchains!

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State of Security Tokens 2023 - Q2 Report

The Security Token Advisors State of Security Tokens 2023 - Q2 report is brought to you by Coinbase!

Our Head of Research and Institutional, Peter Gaffney, dives deep with updates from across the industry, from issuers to platforms to protocols.

This edition covers:

  • Key institutional tokenization initiatives

  • Digital tailwinds in Private Equity, Private Credit, and Commercial Real Estate

  • Secondary Trading Activity

  • M&A and Investments

  • 40+ Service Provider Updates

  • Public and Private Blockchain Developments

Take a read for analysis on common themes emerging for both primary and secondary markets!

This is not financial or investment advice.

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Everything in this newsletter is for informational and entertainment purposes only. Nothing in this report should be taken as financial advice or as an inducement to purchase or sell any security. Nothing in this newsletter should be used as legal advice. Always do your own research before making any decisions regarding financial transactions of securities.