June 2024 Roundup — featuring Garett Jones from Bluechip Ratings and Tyler Sherwin and Ray Buckton from RWA World.
The second edition of QX Institutional includes a real-world implementation of cross-chain atomic settlement in a banking context. The EEA DLT Interoperability Specification — two to three years in the making — has graduated from working group output to production infrastructure. Alongside that milestone, this episode covers the emergence of regulated yield-bearing stablecoins, a new gold-backed instrument from Tether that raises important questions about volatile collateral, a short history of bearer bonds with surprising lessons for RWA privacy design, and Bank of America survey data showing a generational divide in investment preferences that tokenisation is uniquely positioned to address.
Part One: DLT and Blockchain in Finance
The HQLAx/Finality Milestone: Cross-Chain DVP in Production
The headline institutional development of June is the announcement from HQLAx and Finality International of a completed test for intraday repo settlement on DLT, with a launch planned for Q4 2024 subject to regulatory approval. To understand why this matters technically, it helps to know what is happening under the hood.
HQLAx — the fintech firm that brings DLT-based efficiency to securities finance and repo — is built on R3 Corda. Finality International’s payment system is built on Enterprise Ethereum: a private, permissioned Ethereum network. These are architecturally distinct systems. Making them settle atomically — delivery versus payment, simultaneous exchange with no counterparty exposure in the interim — requires genuine cross-chain interoperability, not integration through a central intermediary.
That interoperability is enabled through Finality’s Atomic Settlement Protocol (ASP), which implements the Enterprise Ethereum Alliance’s DLT Interoperability Specification. QualitaX co-chairs the EEA DLT Interoperability Working Group, and this use case is the specification being deployed in a real banking transaction — the product of two to three years of collaborative standards work landing in production-grade institutional infrastructure. HQLAx had already announced it crossed the €1 billion milestone in outstanding agency securities lending delivery-versus-delivery transactions on its DLT platform in June, providing context for the scale at which this infrastructure is operating.
For those wanting the full technical detail of how cross-chain DVP between Corda and Ethereum is achieved using the EEA specification, a full case study will be published as part of QX Institutional Episode 3 in August.
Other Institutional Infrastructure Developments
Fidelity International tokenised its money market fund on JPMorgan’s Onyx digital asset blockchain — a significant institutional endorsement from an asset manager that has been mining Bitcoin since 2015. JPM Coin transaction volumes have also been climbing steadily since Onyx was opened to external development parties, an observation consistent with the programmability thesis from Episode 1: the unlock came when the network became open to external builders.
Japan’s three largest banks announced collaboration on a DLT-based digital identity solution, representing foundational infrastructure investment that will underpin future financial services.
The Central Bank of the UAE introduced new regulatory sandbox regulations supporting blockchain and DLT innovation in finance, continuing the UAE’s pattern of building regulatory infrastructure ahead of market demand.
Regulated Yield-Bearing Stablecoins
Paxos International launched Lift Dollar (USDL), the first yield-bearing stablecoin regulated by the Abu Dhabi Financial Services Regulatory Authority. USDL maintains a 1:1 parity with USD and distributes yield from high-quality US government securities. The product design is meaningful: it combines the stability of a fiat-backed stablecoin with yield-generating potential previously associated with DeFi protocol risk. For institutional investors requiring regulatory compliance alongside return, this category of product — assuming consistent collateral quality — offers a genuinely different value proposition from non-yielding dollar stablecoins.
Franklin Templeton also enabled USDC conversion on its Benji investment platform for the Franklin OnChain US Government Money Fund, deepening the practical integration between regulated tokenised money market products and the broader stablecoin payment infrastructure.
RWA Tokenisation: Notable June Transactions
Several transactions are worth flagging individually. BW Capital raised €3.8 million for an Italian tax credit bond on Ethereum in under six hours — a demonstration of how tokenised bond issuance compresses the capital-raising timeline. Bitfinex issued an investment-grade, over-collateralised tokenised bond on Polygon, adding to the evidence that regulated debt instruments are increasingly comfortable on public permissionless networks. Ondo Finance and Archblock expanded their collaboration to bring hundreds of millions in tokenised real-world assets to the XRP Ledger. Fino tokenised and transferred $9.4 million worth of life insurance policies on the Provenance Network — one of the most significant insurance tokenisation transactions to date in an underrepresented asset class.
Regulatory and Legal Developments
FalconX began accepting OUSG — a digital token representing short-term US Government debt securities — as collateral for trades, executing its first OUSG-collateralised trade on June 11th following its earlier acceptance of BlackRock’s BUIDL. This represents the progressive integration of tokenised Treasury instruments into institutional trading infrastructure as collateral alternatives to stablecoins.
The Monetary Authority of Singapore unveiled the first phase of its Global Layer One (GL1) initiative. GL1 aims to foster development of shared layer infrastructure for hosting tokenised financial assets and applications along the financial value chain, supporting tokenised assets and tokenised money issued by regulated financial institutions from various jurisdictions in different currency denominations — enabling automated, instantaneous cross-border fund transfers and simultaneous foreign exchange, swap, and securities settlement based on fulfilment of predefined conditions.
Several design principles from the report stand out. The architecture focuses on composability — enabling seamless interaction between different financial services on a single network — with Cross-Application Composability as a central goal. Services in scope include interbank transfers, cross-border payments, trade finance, clearing, margin, collateral management, asset and wealth management. The initiative also acknowledges the possibility of redefining traditional roles, including those of Central Securities Depositories. Multi-asset support is designed in from the start: native securities, tokenised securities, tokenised commercial bank money, wholesale CBDCs. Founding participants include BNY Mellon, JPMorgan, Citi, and Société Générale Forge.
The ACPR (France’s financial supervision authority) is working on mandatory smart contract certification. While most respondents to its consultation support the concept, concerns about innovation impact — specifically that blocking uncertified contracts could limit EU access to new protocol developments — represent a genuine tension that will need resolution as smart contract deployment in regulated finance increases.
The Broadridge/Accenture DLT Survey
The Broadridge DLT in the Real World survey (343 global respondents, with Accenture and Ripple) provided some of the most grounded available data on institutional DLT adoption.
On interoperability: 81% of respondents are currently working on it. The focus is distributed across the application layer — technical processes of transfer (42%), data models (38%), and legal validity of transfer (31%). The most striking number is the 44% working at the network level specifically on legal validity of transfer. Interoperability is not purely a technical problem; it is equally a legal and governance challenge.
On business case versus awareness: 66% of DLT initiatives are now driven by real business benefits, but 86% of core business users still do not see the value. The gap between initiative-level conviction and end-user adoption remains the field’s most persistent challenge. The three most-cited barriers to growth: lack of compelling business case and ROI (80%), limited liquidity of tokenised securities, and regulatory and legal certainty around digital asset recognition.
On asset class focus: more than 50% of 2024 projects will focus on tokenisation, with tokenised money market funds seeing a 133% increase in activity and bonds emerging as the central asset class.
Settlement Finality in Blockchain Finance
A paper from the Harvard Policy Lab by Natasha Vasan addresses settlement finality in blockchain-based financial transactions. The key insight: for transactions occurring entirely on Ethereum, simultaneous DVP settlement is the norm and there is typically no principal risk at all. The challenge is hybrid transactions involving both on-chain and off-chain components, or transactions crossing different blockchain networks. The author classifies solutions in three categories: technical (cross-chain messaging, public/private blockchain communications, projects such as Chainlink CCIP), legal (establishing a legally recognised moment of settlement finality for blockchain transactions), and market-based (decentralised settlement insurance, central counterparty models for hybrid transactions).
Part Two: Stablecoin Safety with Bluechip Ratings
Commentary by Garett Jones, Chief Economist, Bluechip Ratings
MiCA’s Unintended Consequences
Uphold Exchange announced it is ending support for several stablecoins ahead of MiCA implementation: USDT, DAI, FRAX, GUSD, and USDP. The list includes two coins with weak Bluechip ratings — USDT (D) and FRAX (D) — where the regulatory concern is well-founded. But it also includes three coins with solid Bluechip ratings of B+ to A: DAI (Paxos Dollar), GUSD (Gemini), and USDP. Uphold will automatically convert remaining balances into USDC.
The pattern illustrates a risk in blunt regulatory compliance frameworks: when exchanges make binary in/out decisions under regulatory pressure, well-rated coins can be swept out alongside genuinely risky ones. Independent rating assessments remain valuable precisely because they provide the continuous spectrum that binary regulatory categorisation cannot.
Moody’s Rates a Tokenised T-Bill Fund
Moody’s has rated Open Eden Labs’ tokenised US Treasury bill fund (T-BILL) — what appears to be the first rating of its kind for a tokenised T-bill fund. The fund received an A grade. Moody’s fully expects the fund to hold overwhelmingly AAA-rated assets; the A rather than higher grade reflects the organisation’s limited operational track record. Moody’s noted that an Ernst & Young audit mitigated some concerns, and that all transactions will be recorded both on-chain and off-chain — a reminder that the industry remains in a transitional hybrid phase.
AF-USD: Another Luna in the Making?
A project from Asymmetry and Ampleforth called AF-USD claims to have “discovered a method for eliminating the need for conventional collateral.” Garrett’s economic assessment is direct: credible stable money — whether national currencies or stablecoins — requires either current collateral or a strong enough credit rating to borrow collateral quickly in a crisis. A coin that dispenses with collateral entirely has not solved this problem; it has deferred the moment of reckoning. Bluechip has not issued a formal rating but the structural description places AF-USD in the same risk category as Terra/Luna.
Alloy: The Economics of Gold-Backed Stablecoins
Tether launched Alloy, a stablecoin over-collateralised by Tether Gold (XAUT) — a coin pegged to the value of approximately one troy ounce of gold. The mechanics: posting $100 worth of Tether Gold allows minting $75 worth of Alloy (approximately 33% over-collateralisation). An automated market mechanism liquidates positions if they become under-collateralised.
Garrett’s economic analysis of the collateral risk: looking back fifty years at gold prices, there have been two substantial nominal price declines. The first ran from approximately 1982 to 2000, following Paul Volcker’s decisive defeat of inflation — a decline of more than 50% in nominal dollar terms that would have been sufficient to trigger automated liquidation at current collateralisation rates. The second came around 2014 as post-crisis recovery reduced safe-haven demand. Both declines were deep enough to test a 33% overcollateralisation buffer.
The case for holding a gold-backed stablecoin is specific: it suits investors who believe medium-to-high dollar inflation is likely over the next several years. For users who simply want dollar stability, Treasury-backed stablecoins remain the more straightforward choice.
Bearer Bonds and the Privacy Architecture of RWA Tokenisation
The most historically grounded contribution in this episode was Garrett’s discussion of bearer bonds and what they can teach designers of tokenised real-world assets. Bearer bonds emerged in the late 1800s as a form of debt security as anonymous as currency — no record of ownership, redeemable by whoever physically presented the bond. The bearer bond market was largely dismantled by the 1982 TEFRA Act in the United States, which effectively taxed bearer bonds out of existence by removing the interest deduction for payments to anonymous holders. But European markets — Germany and Switzerland in particular — kept modified bearer bond markets alive with pragmatic privacy accommodations.
The legitimate reasons for financial privacy are worth enumerating clearly. Personal safety is real: in high-kidnapping-risk environments, visible wealth creates genuine physical danger. Competitive privacy has documented business value: Walt Disney bought land in California at inflated prices once sellers knew who wanted it. For Disney World in Florida, he used shell corporations with oblique names to preserve anonymity during land acquisition.
The lesson for RWA tokenisation: full anonymity is not achievable or desirable in regulated markets, but the history of bearer bonds demonstrates that pragmatic compromise — somewhere between full disclosure and full anonymity — is achievable and has been achieved before. European governments found a version of this compromise to keep modified bearer bond markets alive. RWA tokenisation will need its own version, and the legal frameworks developed in that context are a valuable reference.
Part Three: Real-World Asset Tokenisation with RWA World
Commentary by Tyler Sherwin and Ray Buckton, co-founders of RWA World
The Generational Shift in Investment Preferences
Bank of America’s survey data from June provided striking evidence of a generational divide in asset allocation preferences. Among respondents aged 21–43, 31% of aggregate portfolio composition favours crypto and alternative investments. Among those aged 44 and above, the equivalent figure is 6% — a fivefold gap. This is not primarily ideological. It reflects the investment environment in which different generations formed their financial habits: younger investors came of age during a decade of near-zero interest rates that made conventional 60/40 portfolios look uncompetitive, and during a period of high inflation that created genuine demand for alternatives.
RWA World’s framing: tokenisation democratises access to the alternative asset classes that the younger cohort already favours. Alternative investments have historically been available only to institutional and accredited investors. Tokenisation — through fractional ownership, 24/7 settlement, and global accessibility — extends that access broadly. The generational preference shift is already established; tokenisation is the infrastructure that can serve it at scale.
Institutional Developments
The DTCC, Euroclear, and Clearstream — with BCG — published a digital asset control framework covering how large depository institutions and banks can handle digital assets in a way that ensures all risks are accounted for and that counterparties can transact with confidence. This is post-trade risk management infrastructure for institutional digital asset adoption being deliberately designed by the entities that currently dominate global securities settlement.
JPMorgan’s Onyx had a significant month. Fidelity joined the network. JPM Coin transaction volumes are climbing since Onyx was opened to external developers. This is the first time a very large institutional private blockchain network is starting to show genuine network effects — and the timing correlates with the opening to external builders, consistent with the programmability thesis.
Deutsche Bank joined Singapore’s Project Guardian, the ongoing asset tokenisation consortium that has been running since the late 2010s, bringing together banks, financial institutions, and regulators to explore tokenisation applications.
Regulatory Landscape
The SEC dropped its investigation into Consensus and will not pursue the question of whether ETH’s proof-of-stake migration constitutes a security. The significance extends beyond Ethereum: it opens the question of whether other proof-of-stake networks, upon achieving sufficient decentralisation, might similarly qualify as non-securities.
The Bank of International Settlements and Bank of Canada launched an innovation centre in Toronto. Tokenisation was not explicitly named in the prospectus, but it is widely expected to feature in its research agenda.
SAB 121 was vetoed by President Biden despite bipartisan congressional passage, citing the need to preserve the SEC’s enforcement flexibility. The industry consensus is that SAB 121’s days are numbered, but most major institutions are planning their timelines around the November US election.
Ecosystem Developments
Provenance Network tokenised $9.4 million in life insurance policies with partner Infino. Insurance remains a comparatively underrepresented category in asset tokenisation, despite being foundational infrastructure for the modern economy.
Superstate’s USB fund (short-dated US Treasuries) was used as collateral by FalconX in lending activity — a live demonstration of the interplay between tokenised traditional assets and crypto-native trading infrastructure. With DeFi yields often now below the approximately 5% offered by tokenised Treasuries, the relative attractiveness of compliant tokenised Treasury instruments for institutional market participants is growing.
Chainlink topped real-world asset crypto development activity for the second consecutive month, measured by GitHub commit activity. No serious RWA project is not using Chainlink for some part of its infrastructure. The development activity leadership reflects genuine infrastructure dependency across the tokenisation ecosystem.
RWA World’s database crossed 400 listed real-world asset companies in June — marketplaces, Layer 1 and Layer 2 networks, token issuers, and asset classes.
Key Takeaways
DLT in Finance
- HQLAx/Finality cross-chain DVP marks the first live implementation of the EEA DLT Interoperability Specification in a banking context — Corda and Enterprise Ethereum settling atomically in production-grade infrastructure
- GL1 (MAS) is the most ambitious publicly announced initiative for shared tokenisation infrastructure — asset-agnostic, multi-jurisdiction, composability-first, with a scope that includes redefining CSDs
- 81% of DLT practitioners are working on interoperability; 86% of core business users still do not see the value — bridging that gap is the primary adoption challenge
- Tokenised money market funds are the leading 2024 growth category (133% increase); bonds are the emerging central asset class
Stablecoins
- MiCA compliance pressure is producing blunt exchange decisions that delist well-rated coins alongside genuinely risky ones — independent assessment remains essential
- Moody’s is actively rating tokenised funds, building institutional rating infrastructure for on-chain instruments
- Alloy introduces gold-backed stablecoin collateralisation with a specific use case for inflation-hedging investors, but meaningful collateral volatility risk at current overcollateralisation rates
- Bearer bond history provides a practical legal model for the privacy/transparency compromise that RWA tokenisation must navigate
RWA Tokenisation
- 31% of younger investor portfolios (ages 21–43) already favour crypto and alternatives; tokenisation is the infrastructure that democratises access to this preference at scale
- JPMorgan Onyx’s opening to external developers is driving meaningful transaction volume growth — network effects from institutional private blockchains are real when accessibility improves
- SAB 121 veto maintains the bank custody barrier but is widely viewed as temporary; most institutions are planning around the November 2024 US election
- Chainlink leads developer activity in RWA for two consecutive months; Provenance, Superstate, and FalconX are demonstrating live collateralisation use cases for tokenised Treasuries