Tokenisation, payments and stablecoin remain key trends in digital asset space

SINGAPORE - Tokenisation of real-world assets, payments and stablecoin have continued to dominate in the cryptocurrency space, said market players gathered in Singapore for a series of crypto events.

They noted that tokenisation, which is the process of digitally representing real and physical assets such as bonds and equities on the blockchain, is rapidly transforming capital markets as it improves liquidity and capital efficiency.

Mr Michael Shaulov, chief executive and co-founder of custody technology provider Fireblocks, told The Straits Times that tokenisation is driving Wall Street’s adoption of blockchain technology.

A prime example is global asset manager BlackRock’s tokenised treasury product BUIDL, Mr Shaulov said, adding that it is the first such product to surpass the US$500 million (S$647 million) market value, taking just four months after its debut.

“Additionally, we have seen the number of tokenisation projects on our network triple this year and we expect this momentum to build further,” he added.

Mr Saad Ahmed, the Asia-Pacific chief for crypto exchange Gemini, told ST that currently the performance of Bitcoin has an impact on tokenised assets.

He expects more activity from some of the other cryptocurrencies when Bitcoin goes above the current price range it has been trading at for the past few months.

He was speaking on the sidelines of crypto conference Token2049, which is being held in Singapore on Sept 18 to 19.

The use of crypto in transactions is another trend that stands out now.

“The efficiency that you can get from using crypto as a sort of infrastructure layer to power payments is really powerful. We’re seeing a lot of innovation there,” Mr Ahmed noted.

Mr Jeremy Allaire, CEO and co-founder of global payments firm Circle Internet Financial, told ST that there are now more start-ups that are looking to build applications that can drive demand and user adoption.

And, as Web3 technology capabilities grow, companies are seeking to build a super app type of experience, he said.

For Mr Hassan Ahmed, country director of Coinbase Singapore, the industry has reached a new frontier in stablecoin innovation.

He said existing stablecoins, like USD Coin which is issued by Circle, continue to grow access by launching on new networks, even as new stablecoins are created.

“There is a lot of energy, particularly in Asia, around non-US dollar stablecoins such as the Singapore dollar, the Philippine peso and the Australian dollar stablecoins,” Mr Ahmed of Coinbase said.

He also expects artificial intelligence (AI) to revolutionise the crypto market. “Looking ahead, businesses must prepare for an AI-driven financial landscape by integrating AI into their payment systems to capitalise on the growing AI-to-AI economy and benefit from the innovation and opportunities it presents,” he said.

Mr Alex Svanevik, who is co-founder and CEO of analytics platform Nansen, thinks staking is likely to be a key trend in the months ahead.

Staking is a service that lets users generate yields in return for allowing their tokens to be used to facilitate transactions on a blockchain.

Nansen on Sept 10 announced its acquisition of a staking service provider.

Then there are others such as local lender DBS, whose digital exchange told ST in July that it is studying how it can provide staking to clients.

Bright spots aside, headwinds such as inconsistent regulatory frameworks in different jurisdictions remain and add to uncertainties, some market players noted.

The key challenge for the digital assets industry, Mr Allaire said, is making the technology work everywhere and at scale so that the masses can use it.

He added that having legal clarity on what digital assets are, how they are treated and how users are protected will boost adoption.

Other industry players, like Mr Shaulov, believe scalability and interoperability remain ongoing challenges.

This is especially so as blockchain networks must evolve to support a growing range of use cases without compromising security or performance, he said.

Market observers are also keeping close tabs on November’s US election, which they say will impact the industry beyond the country. Mr Svanevik said: “The US election will certainly cause some turbulence – not just for crypto, but in all markets. The current US administration has created a hostile environment for crypto, but that may change materially after the election.”

Prominent names in crypto are gathered in Singapore for a series of events this week.

Among the conferences is Token2049, which is in its third year in Singapore. The two-day event has 400 exhibitors, with an expected attendance of more than 20,000.