Ondo Takes a Stand Against Nasdaq’s Tokenization Initiative

Today in cryptocurrency, Ondo Finance is requesting that the US SEC postpone or dismiss Nasdaq’s tokenized securities initiative. In the meantime, major banks in Japan are allegedly preparing to collaborate on a yen-linked stablecoin, and over five fresh crypto ETFs were submitted this week despite the persistent US government shutdown.

Ondo Finance to SEC: Postpone Nasdaq’s tokenized securities proposal

Ondo Finance appealed to the US Securities and Exchange Commission (SEC) to postpone or deny Nasdaq’s proposition to exchange tokenized securities, arguing it lacks clarity and might provide established market players an undue advantage.

In a Wednesday letter to the authority, Ondo — a blockchain firm that issues tokenized variants of conventional assets — stated that regulators and investors cannot adequately assess Nasdaq’s proposal without public insights on how the Depository Trust Company (DTC) will manage blockchain settlements. DTC functions as the primary depository for US securities and aids in their post-trade settlement.

While expressing support for Nasdaq’s advancement toward tokenization, Ondo cautioned that “Nasdaq’s reference to confidential information suggests unequal access that deprives other firms of a fair chance to respond.”

The enterprise also highlighted that Nasdaq’s regulation cannot be implemented until DTC finalizes its system, asserting there’s no detriment in delaying approval until additional features are available. It called on the SEC to focus on “open collaboration and clear standards” before reaching a final conclusion.

Ondo’s correspondence addresses Nasdaq’s Sept. 8 filing with the SEC, wherein the world’s second-largest stock exchange sought to modify its regulations to permit the trading of tokenized securities.

Tokenized shares are digital representations of conventional stocks recorded on a blockchain.

If sanctioned, the initiative would allow tokenized shares to trade alongside traditional ones, with settlements executed through the DTC’s upcoming system for tokenized securities.

Nasdaq’s proposal was published in the Federal Register on Sept. 22, initiating the SEC’s 45-day examination phase, which extends until early November or late December if prolonged.

Japanese major banks to collaboratively launch yen-pegged stablecoin: Report

Three of Japan’s largest banks are reportedly set to collaboratively launch a yen-pegged stablecoin, contributing to the region’s increasing adoption of crypto technology in its financial ecosystem.

Nikkei reported on Friday that Mitsubishi UFJ Financial Group (MUFG), Bank Sumitomo Mitsui Banking Corp. (SMBC), and Mizuho Bank intend to enhance corporate settlements and lower transaction expenses through a yen-based stablecoin initiative utilizing MUFG’s stablecoin issuance framework, Progmat.

The banks, which collectively service over 300,000 corporate clients, aim to standardize the token to ensure it’s interoperable for payments within and between businesses. The consortium plans to launch the stablecoin by the close of the year.

Mitsubishi Corp. will be the first organization to implement the stablecoin for internal transfers. With more than 240 subsidiaries worldwide, the company aspires to simplify international payments on dividends, acquisitions, and customer transactions, reducing fees and administrative burdens.

If successful, the endeavor could establish Japan’s inaugural bank-supported stablecoin network under a unified system.

“ETFtober” expands, with over five new crypto ETFs submitted this week

A surge of activity has occurred in the realm of crypto exchange-traded funds, with at least five new product applications lodged with the US Securities and Exchange Commission this week, despite the ongoing government shutdown.

The latest development came from VanEck, which submitted an S-1 form with the SEC on Thursday for the VanEck Lido Staked Ethereum ETF, which will follow the performance of stETH, Lido’s liquid staking token.

Due to the protocol-based liquid staking activities underpinning stETH, “the trust anticipates accruing certain staking rewards through its ownership of stETH,” it remarked.

21Shares submitted for a leveraged crypto ETF with 2x exposure to the Hyperliquid native token, HYPE, on Thursday. The leverage applies solely to the single-day performance of the token, rather than longer durations.