Dr. Florian Fruth

Want to lead in tokenization? Map your strategy to Blockchain Law IV, MiFID II, and MiCAR now. Luxembourg is a central hub for tokenization in Europe, with a legal framework that aligns with EU regulations. It has built a reputation for innovation, especially in funds and real assets. Three key regulations are shaping this space: → Blockchain Law IV: Legal certainty for tokenized securities. → MiFID II: Protecting investors and ensuring market integrity. → MiCAR: Defining rules for crypto-assets and stablecoins. These frameworks unlock opportunities in securities, funds, and real estate. Success stories, like Franklin Templeton’s tokenized UCITS, highlight the potential. However, challenges remain: tax clarity, secondary market liquidity, and interoperability need solutions. How can you navigate this ecosystem? ✔️ Align your strategy with Blockchain Law IV, MiFID II, and MiCAR. ✔️ Collaborate early with the CSSF to ensure compliance. ✔️ Explore use cases like fractional ownership. ✔️ Participate in working groups tackling interoperability. Tokenization in Luxembourg isn’t just a trend-it’s an opportunity to lead the next wave of innovation. Which asset class excites you most for tokenization? Your downloadable report to be explored below. Joshua Nkansah, CFE, CertIA, CAFCA Geethika Loku Kodikara Arachchige Timothy Sherry CAMS Walmir Celestino Erik Lam Cedric Legendre Steve Muscat Azzopardi TEP Amna Alvi Mathieu D. Jinyoung Kim Andrey Kononov Xiao BRANDA Sara Berujon George Kortesis

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ETH staking update 🚨 Kiln validators exiting last week following a security incident involving its API has caused the unbonding period to spike to ~45 days (vs just a few days avg). This is the longest delay in ~2 yrs. What this means: • Liquidity risk is real — your staked ETH is stuck longer • Exit queue pressure growing • While this hasn't impacted on-chain liquidity, nor have we seen depegs, this impacts DATs and liquidity sleeves • Partners claiming their credit lines jumped from 50bps to 5%+ drag if you need liquidity Big moment for credit lines, LSTs & liquidity sleeves especially the DATs we've spoken to given their size https://lnkd.in/evQGNxXM

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The #Genius Act: Financial Innovation or Strategic Power Play? With the recent signing of the Genius Act, the U.S. has entered a new phase in the evolution of digital finance. For the first time, USD #stablecoins are subject to a clear federal framework, a long-awaited milestone for crypto legitimacy. But while the headlines speak of “clarity” and “innovation,” a much deeper and more strategic shift is underway. Stablecoins, once seen as a niche crypto tool, have become essential #infrastructure for global #payments, #DeFi applications, and financial access in developing markets. They offer digital dollar liquidity where traditional #banking fails, enabling fast, cheap, and stable cross-border transactions. But the Genius Act changes the game: ✅ Stablecoins must now be fully backed by cash or short-term U.S. Treasuries ⛔ Interest payments to end users are explicitly forbidden The result? Yield-bearing stablecoins, a key DeFi innovation, lose their main attraction. Instead of competing with banks, stablecoins now become extensions of U.S. debt management. Welcome to what observers are calling the “Mar-a-Lago Accord”: an implicit pact that channels global demand for digital dollars into zero-yield capital flows into the U.S. Treasury. In this model, international users fund U.S. debt, not through bond markets paying interest abroad, but through stablecoin reserves held domestically. A brilliant twist: the U.S. still pays interest, but it stays within U.S. institutions rather than flowing out. This is not just clever monetary design, it’s monetary geopolitics. If USD stablecoins continue to gain traction in the Global South, they could cement the dollar’s dominance for decades to come, without the traditional costs of global reserve currency status. What’s particularly striking: responsibility for stablecoin oversight has shifted away from the Federal Reserve toward the U.S. Treasury, the very institution that stands to benefit most from increased demand for short-term government debt. This creates a clear conflict of interest: the regulator is now also the main financial beneficiary. Risks: Systemic fragility, if confidence in one major stablecoin fails, the shock could hit both crypto and traditional bond markets alike. The big picture: The Genius Act doesn’t liberate digital finance, it subtly turns stablecoins into a geopolitical tool and a domestic refinancing engine. Whether it’s financial genius or monetary overreach remains to be seen. But one thing is clear: America is once again rewriting the rules of global finance. Europe should take note. The full article (in German) can be found in my newest column at Payment & Banking - PBA Experts GmbH. Link in the comments.

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🔐 Hacken, Blockchain Security Auditor 𝗖𝗼𝗺𝗽𝗹𝗲𝘁𝗲𝘀 𝗦𝗺𝗮𝗿𝘁 𝗖𝗼𝗻𝘁𝗿𝗮𝗰𝘁 𝗔𝘂𝗱𝗶𝘁 𝗳𝗼𝗿 AllUnity’𝘀 𝗘𝗨𝗥𝗔𝗨 𝗦𝘁𝗮𝗯𝗹𝗲𝗰𝗼𝗶𝗻 We again proof our institutional approach. As a regulated European fintech advancing the launch of #EURAU, a fully compliant euro-denominated stablecoin, we recognize that robust infrastructure and rigorous audit standards are essential to building trust in the evolving digital finance landscape. 🧾 𝗔𝘂𝗱𝗶𝘁 𝗛𝗶𝗴𝗵𝗹𝗶𝗴𝗵𝘁𝘀: ✔️ 0 critical findings ✔️ 0 high-severity issues ✔️ 0 medium-severity issues ✔️ All low/informational items acknowledged, with remediation underway 💬 Peter Grosskopf, CTO / COO, AllUnity “Partnering with Hacken for our smart contract audit reflects our commitment to the highest standards of on-chain security. Their independent review reinforces confidence in the integrity of our infrastructure.” 💬 Turgay Arda Usman , Smart Contract Auditor, Hacken "The audited AllUnity token leverages proxy patterns for upgradability and incorporates robust administrative controls, including a comprehensive transfer blacklisting mechanism. These features together significantly enhance both operational flexibility and compliance management." This milestone underscores AllUnity’s dedication to secure, transparent, and MiCAR-aligned infrastructure, paving the way for a scalable and trusted digital euro ecosystem. 📄 𝗥𝗲𝗮𝗱 𝘁𝗵𝗲 𝗳𝘂𝗹𝗹 𝗮𝘂𝗱𝗶𝘁 𝗿𝗲𝗽𝗼𝗿𝘁: https://lnkd.in/eA3j6p7a 🔗 𝗥𝗲𝗮𝗱 𝘁𝗵𝗲 𝗳𝘂𝗹𝗹 𝗮𝗻𝗻𝗼𝘂𝗻𝗰𝗲𝗺𝗲𝗻𝘁: https://lnkd.in/eRd3NNFM For marketing purposes only. No regulatory review or approval. EMTs redeemable at par anytime. Full White Paper: https://lnkd.in/ewZPvcA4

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A clear leader is emerging. Ethereum has shifted from speculation to a powerhouse in institutional finance thanks to its dominance in stablecoins and tokenized real-world assets (RWAs). Stablecoins built on Ethereum now make up over half of the market and the RWA space has grown 413% since early 2023 (~$5.2B → ~$26.7B), driven by big names like BlackRock, Franklin Templeton and others.

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Please read my new working paper on "Stablecoins – How will they impact financial centers?" In English: https://lnkd.in/e--6mKqZ In Chinese: https://lnkd.in/epiVxprK It contains data from a survey among the members of the World Alliance of International Financial Centers (WAIFC) on their expectations on the digital money landscape in 5-10 years: 1. We foresee a multipolar future in which there will be no clear winner among the three competitors: #CBDCs, #TokenizedDeposits, and regulated #Stablecoins. 2. CBDCs will become widespread, particularly in advanced and emerging economies. Wholesale CBDCs will likely see near-universal adoption among major central banks due to significant efficiency gains. Retail CBDCs will experience varied adoption, heavily dependent on design choices and public trust. 3. Regulated stablecoins are poised for massive growth if robust regulatory frameworks are implemented and enforced globally. 4. Tokenized deposits could become a significant force. They combine the trust of established banks with the efficiency of blockchain rails for settlements. 5. The future belongs not to a single form of digital money but to an integrated ecosystem where CBDCs, regulated stablecoins, tokenized deposits, and enhanced traditional systems interoperate seamlessly, driving efficiency, inclusion, and new economic opportunities on a global scale. Many thanks to the Asian Financial Corporation Association for publishing this article.

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Swiss Banking - The Deposit Token: Proof of Concept Source: https://lnkd.in/g7ce5mta #poc #deposit #token #money #blockchain #switzerland Credits: Andrea Luca Aerni Thomas F. Natalie Graf Martin K. Hess Simon K. Basler Florian Baumann Thomas Eichenberger Sandro Germann Pascal Gisel Sebastian Herkelrath Mazda Hewitt Hans Kuhn Andreas Studer Thomas Alexander Dominic Wyss Samuele Rodi Loris Penelon Highlights: The PoC explored a non-native, account-based tokenized deposit model, where payment instructions were represented on a blockchain with the blockchain acting as an informational layer rather than the settlement layer. This approach minimized disruption to existing banking infrastructure, reducing operational risks and regulatory friction while enabling rapid deployment and experimentation. However, the model has a few important constraints to consider. First, it did not integrate DLT with core banking systems and remained fully dependent on traditional off-chain payment processes and controls. Second, transactions required settlements via SIC and subsequent reconciliation with on-chain activities to achieve finality. Finally, the model applied was fully compliant, but offered only limited compatibility with fully tokenized ecosystems, restricting potential for broader blockchain-based use cases. Successful future adoption and the application of Deposit Tokens (as opposed to tokenized Deposits in the PoC) depend on several critical factors. First, a robust framework for operational role clarity and on-chain governance must be established. Second, close collaboration with the Swiss National Bank will be required to ensure alignment with wCBDC initiatives incl. alternative considerations of DLT integration possibilities. Third, Deposit Tokens must be operationally and legally on par with traditional deposits. This condition is now generally fulfilled, as tokenized from the PoC deposits represent payment instructions and deposits exist exclusively off-chain, therefore qualifying as regulated bank deposits and falling under the deposit insurance. However, it remains essential that each bank ensures that its technical and legal setup fully complies with the requirements for this classification. An advanced Deposit Token design will present significant challenges, particularly in the complex integration with core banking systems. Banks will need to implement new protocols and frameworks that enable seamless communication between traditional banking processes and blockchain technology. This includes ensuring that on-chain activities are accurately reflected in off-chain processes. By overcoming these challenges, banks might leverage the full potential of Deposit Tokens, offering enhanced transparency, efficiency, and innovation in financial services.

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🌍 The Stablecoin Revolution: Transforming Global Finance 2025 marks a turning point in the evolution of money. Stablecoins, once seen as niche crypto tools, are now emerging as critical infrastructure for global commerce. Key highlights from the Stablecoin Revolution report: 🔹 Regulatory Breakthrough – The U.S. GENIUS Act provides long-awaited clarity, fueling institutional adoption and sparking global regulatory convergence. 🔹 Market Transformation – With $625B in trading volume (May 2025) and projections of $1.6–3.7T by 2030, stablecoins are reshaping payment systems and cross-border flows. 🔹 The Silent War – USDC vs USDT isn’t just about market share; it’s a clash between compliance-driven trust and accessibility-driven momentum. 🔹 Traditional Finance Response – From JPMorgan’s deposit tokens to the Fiserv-PayPal partnership, established players are building hybrid models that merge stability with innovation. 🔹 Asia Leading Adoption – Singapore’s gold-standard regulation, Hong Kong’s licensing regime, and emerging market use cases (from Nigeria to Venezuela) show how stablecoins are becoming economic lifelines. The future of finance will be: 💠 Digital 💠 Global 💠 Powered by stablecoin and CBDC infrastructure The question isn’t if stablecoins will define tomorrow’s financial system—it’s who will lead their evolution.

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