Welcome to the Monday edition of the Crypto In America newsletter!
What you’ll read: A new tokenized stock venue is betting on issuer consent and education to bring a skeptical corporate America around to the idea of tokenization. Coinbase secures final approval to operate a national trust bank. Plus, what to watch this week.
A new player is entering the tokenized stock race under the SEC’s Innovation Exemption, betting it can win over a skeptical corporate America and bring more public company shares onchain.
Formation Securities, the tokenized securities arm of the newly merged Solana-based firms Orca and Loopscale, notified the SEC on Monday of plans to operate a tokenized securities venue under the agency’s exemption.
So far, the venue has secured consent to tokenize shares from three crypto-related public companies: self-custody wallet provider Exodus EXOD 0.00%↑, Solana treasury company Forward Industries FWDI 0.00%↑ and crypto investment firm Galaxy Digital GLXY 0.00%↑. Trading is expected to begin early next year.
Tokenization has attracted its fair share of bad press lately, with dozens of companies objecting to plans by OKXICE, a joint venture between crypto exchange OKX and New York Stock Exchange parent Intercontinental Exchange, to tokenize their shares. An ad campaign in The Wall Street Journal has also urged public companies to push back against the initiative.
While OKXICE gave companies 30 days to object to having their shares tokenized, Formation is seeking their approval upfront, betting that working directly with issuers and educating them about the benefits of tokenization will help bring more of corporate America onchain.
“Tokenized stocks will succeed only if public companies see the value in them, and we intend to build this market together with issuers,” Formation Securities President Chris Montagano said in a statement.
In an interview with Crypto In America, Montagano, a former SEC attorney who helped take real estate company Phillips Edison public, said he understands why corporate legal departments have been quick to object to tokenization proposals they may be unfamiliar with. He acknowledged that the growing list of objections to OKXICE’s tokenization plans has dampened enthusiasm around the SEC’s initiative but believes Formation can buck the trend.
“I am confident we can reinflate the room with an alternative approach, which is one of engagement and inclusiveness,” he said.
As for why companies remain skeptical of tokenization, he pointed to concerns about illicit activity and asset security, with crypto’s reputation for hacks and scandals continuing to fuel distrust.
For now, Formation’s initial issuers are all crypto-linked companies, but Montagano is optimistic the model will attract more traditional names over time. He said Formation is already in discussions with other public companies and ETF issuers interested in participating and expects the lineup to expand over the next couple of months.
Powered by Orca’s automated market maker technology on Solana, the venue will offer 24/7 trading, self-custody and onchain settlement while preserving voting, dividend and other shareholder rights. Partners include Superstate, Securitize, Anchorage Digital, BitGo and Fireblocks.
Formation’s notification follows last week’s launch of TSV LLC, which became the first venue to execute tokenized stock trades under the SEC’s Innovation Exemption, trading tokenized shares of Canton Strategic Holdings CNTN 0.00%↑ on the Canton Network.
Coinbase Wins Final OCC Approval to Operate National Trust Bank
The U.S.’s largest crypto exchange has received final approval from the Office of the Comptroller of the Currency to operate a national trust bank, according to the company.
The approval brings Coinbase’s institutional digital asset custody business under federal supervision, but does not authorize it to take deposits or lend like a traditional bank.
Coinbase joins a growing list of crypto firms securing national trust bank charters, including Ripple, BitGo, Circle and Fidelity Digital Assets, as the industry pushes further into the federally regulated banking system.
The move comes as banking trade group the Independent Community Bankers of America is suing the OCC in federal court in Washington, D.C., challenging its authority to grant national trust bank charters to crypto firms. The group argues the agency is allowing them access to the federal banking system without subjecting them to the same regulatory requirements as traditional banks.
👀 What To Watch This Week
Crypto markets are starting the week on the back foot, with Bitcoin hovering around $74,000 and Ether near $2,100 ahead of a big week for U.S. inflation data and Fed speeches. October CPI lands Tuesday, followed by PPI on Friday, with hotter-than-expected readings potentially adding to pressure on crypto prices.
Monday
The House and Senate return to Washington for the lame-duck session following the midterm elections.
Earnings: MARA Holdings (MARA), Exodus (EXOD), Sharplink (SBET), Trump Media & Technology Group (DJT), BitGo Holdings (BTGO) and HIVE Digital Technologies (HIVE).
8:40 AM: Fed Vice Chair for Supervision Michelle Bowman speaks on community banking in Boston.
Tuesday
Earnings: CoreWeave (CRWV), Bitdeer Technologies (BTDR) and eToro (ETOR).
4:00 AM: Fed Governor Christopher Waller speaks at the Bank of England Watchers’ Conference.
6:00 AM: NFIB releases its October Small Business Optimism Index, measuring business confidence, hiring plans and inflation concerns.
8:30 AM: October Consumer Price Index (CPI) released, a key measure of inflation. Economists expect consumer prices to rise 0.2% month over month, down from September’s 0.6% increase.
3:30 PM: Fed Vice Chair for Supervision Michelle Bowman speaks on the economic outlook.
Wednesday
Veterans Day.
The bond market is closed. Stock markets are open.
Thursday
The European Banking Authority begins directly supervising Circle’s USDC reserves, liquidity and capital requirements after designating it the EU’s first “significant” stablecoin under the MiCA regulatory framework.
Earnings: Figure Technology Solutions (FIGR) and Gemini Space Station (GEMI).
10:00 AM: Fed Governor Michael Barr speaks on AI and inequality.
Friday
8:30 AM: October Producer Price Index (PPI) released, a key measure of wholesale inflation. The report follows September’s 6.3% annual increase, the largest in more than three years, and could offer further clues about the direction of interest rates.
10:50 AM: Fed Vice Chair for Supervision Michelle Bowman speaks on banking supervision and regulation.
7:00 PM: Fed Vice Chair Philip Jefferson speaks on new technology, productivity and its implications for the economy at UC San Diego’s Economics Roundtable.
Remember: New editions of the Crypto In America newsletter drop every Monday and Thursday.
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