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Q1 Update
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Digital Asset Momentum is Building in 2025
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After wrapping up 2024 with passing Gate 1 of the UK’s Digital Securities FMI Sandbox (DSS), 2025 is already shaping up to be a defining year, not only for ClearToken but also the industry.
Traction continues with market participants responding enthusiastically to our innovative approach, including our development of a fungible perpetual future contract (see below). Meanwhile the need for 24/7 clearing and settlement requirements is becoming increasingly evident to the industry.
New White Paper:"The Case for A CSD for Digital Assets
Today, we launch the first instalment of our new white paper –"The Case for A CSD for Digital Assets", exploring the critical role of a regulated securities depository in financial markets. The first chapter in the series, “The Settlement Challenge” looks at the risks and inefficiencies of on-chain and off-chain settlement and how a CSD structure supporting digital assets can resolve the issues typical of today's bilateral, free of payment arrangements in digital asset settlement.
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Read Chapter One: The Settlement Challenge, Now! |
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Keep an eye on our website and LinkedIn page over the coming weeks as we release further chapters and insights.
Future Is Now:
Our mission to bring institutional post-trade solutions to digital assets has also been accelerated by recent global regulatory developments – catch up with major regulatory updates – described below. We were once ahead of our time but now it is clear that the future we envisioned has arrived and our two years of regulatory groundwork now appears extraordinarily well-timed.
Our priority is to build with and for the market:
Q1 2025 has been marked with intense client engagement as we build our settlement system and CCP networks, culminating in recent weeks with face-to-face meetings with many of our global partners in the USA. Read on for more details.
We’ll see many of you at our launch partner and investor roundtable. We are excited by your collective engagement and very grateful for the input provided through our working groups in readiness for the imminent go-live of our DVP net settlement service.
And more good news to come… stay tuned:
Finally, I look forward to being able to make some very exciting announcements in the coming weeks.
Together, with participants across traditional and digital markets, we're forging a clear path to the next frontier in finance. Join us on the journey to 24/7 global markets – drop us a line anytime to arrange a Zoom or in-person conversation.
Ben
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Building Our Governance Structure
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Clare Conby
Claire Conby joined the board of ClearToken Depository Limited, the entity that will run our DVP settlement service.
Claire brings over 20 years of experience in risk management, compliance and MLRO roles. She is currently an Executive Director at the Digital Pound Foundation as well as working with fintechs in payment services, with a strong focus on digital assets and emerging forms of money.
Henry Daubney
Henry Daubney has joined our Group Board and also the board of ClearToken Depository Limited. He will act as Chair of the Audit and Risk Committee for both entities.
Before retiring Henry was a senior banking partner at PwC with over 35 years of experience in financial services including as the lead relationship and engagement partner for Euroclear. In addition to his role at ClearToken, Henry is a Non-Executive Director of OSB plc, a UK Listed financial services company.
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Our Initiatives
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DvP Net Settlement Solution
We continue to progress towards launch of our innovative DvP Net Settlement Solution for spot crypto, stable coins and fiat currencies with initial firms now onboarding and completing mandatory checks. Our Working Group concept to delivery allows us to support settlement of small discrete related groups of participants before expanding to connect with the wider network.
Fungible Perpetual Future Contracts
ClearToken is partnering with leading liquidity providers and major cryptocurrency exchanges to create an innovative perpetual future contract. This contract aims to set industry standards for liquidity and versatility, supporting both investment and hedging needs. Key elements like the reset period, settlement price, and funding rate will be standardised.
The contract's main innovation is its fungibility across exchanges, allowing traders to open and close positions across venues, enhancing price discovery and liquidity access. This model, inspired by the Options Clearing Corporation, aims to make crypto derivatives trading more capital efficient by combining clearing offsets between financing (repo) and term derivatives products.
CCP Readiness
Ahead of our CCP launch, we are engaging with our launch venues and future Clearing Members, who will play a crucial role in settlement, risk, margin and collateral management, guaranteeing client obligations. We are committed to establishing a robust market structure from day one. Early participants in these groups will form the basis of our formal Members’ Committees for ClearToken CCP.
Looking Ahead: Cleared Repo/Lending Markets
The painful failures of crypto lenders such as Celsius and Genesis have underscored the urgent need for centralised clearing solutions.
ClearToken is co-ordinating with fiat and crypto lenders to establish a cleared repo market that will set new standards for safety, liquidity, and capital efficiency. The market is ready for a structural reset, and our CCP will be essential in enabling this transition.
Get Involved
Your expertise and insights are crucial to shaping these market innovations and we welcome engagement from all market participants.
Whether you're a trading firm that will require a clearing firm, or interested in becoming a Clearing Member, please join our working groups to learn more about the items above. Reach out to Partner Managers Rajeev Chopra, Peter Best or our Sales inbox to be part of the future of cleared digital asset markets.
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Regulatory Momentum is Creating Tailwinds
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UK
The FCA’s Admission & Disclosures and Market Abuse Regime for Cryptoassets (MARC) Discussion Paper closed for responses on the 14th March 2025. It follows the previous Discussion Paper on stablecoins issued in November 2023. A consultation paper on the responses is expected later this year followed by further papers covering various topics with policy statements early in 2026.
The UK Treasury, HMT, and Debt Management Office (DMO) published a preliminary market engagement exercise for the Digital Gilt Instrument (DIGIT) Pilot, which will culminate in an invitation for platforms to tender in late Spring 2025.
More broadly the UK government published an action plan that will enable a regulatory system that supports innovation and economic growth with a plan to overhaul the regulatory system and keep pace with innovation.
US
Repeal of SAB 121:The SEC rescinded Staff Accounting Bulletin (SAB) 121, via SAB 122, eliminating the requirement for banks and financial institutions to record customer crypto holdings as liabilities on their balance sheets.
In addition, it introduced the GENIUS Act, establishing a regulatory framework for payment stablecoins, SEC’s Crypto Task Force, led by Commissioner Hester Peirce, focused on recommending practical policy measures and proposed a CFTC Pilot Program for tokenised non-cash collateral.
Significantly, the US Strategic Digital Asset Reserve was established through an executive order in March with two main components:
- Strategic Bitcoin Reserve: capitalised with Bitcoin (BTC) held by the Department of the Treasury (DoT) forfeited through criminal or civil asset forfeiture proceedings. This BTC will be maintained as reserve assets to meet governmental objectives.
- United States Digital Asset Stockpile: This includes all other digital assets obtained by the DoT through forfeiture proceedings. These assets will be managed strategically to support the nation's financial stability and security.
Custodial accounts will be overseen and managed by the Secretary of the Treasury.
EU
The Markets in Crypto-Assets (MiCA) Regulation is now fully in force, representing a significant step towards creating a unified regulatory framework for crypto assets across the EU.
Several crypto firms and exchanges have already received full MiCA licenses from EU regulators. Read more here.
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Events
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Upcoming
9th-10th April – Paris:
6th-7th May – Zurich:
12th May – London/Online:
- Westminster Forum: The future for digital and cryptoassets in the UK, Niki will be speaking on Widening the adoption of crypto technologies in mainstream financial markets
14th-15th May – Paris:
- TradeTech: Traditionally an equity markets conference but with this year’s agenda focused on how to revitalise growth in Europe, the talk is increasingly likely to turn to digital assets and increased efficiency of markets.
Recently Attended
The digital asset landscape is evolving rapidly, and our senior leaders have been engaging with regulators, market participants, and innovators in key conversations that are shaping the future of finance.
March
- Digital Asset Summit (DAS) Toby Thwaites, our Product Manager reported back from New York that enthusiasm for ClearToken’s capabilities is healthy.
- FIA Boca: Eric and Ben were amongst over 1,000 delegates, global exchange, trading, clearing and technology leaders from both traditional and emerging digital asset trading who converged to debate, collaborate, network and “get things done”. An incredibly productive few days for the ClearToken network.
February:
- UK Growth and Competitiveness Forum: Niki participated in a private forum City of London Corporation event attended by senior politicians, government officials and corporates to discuss UK financial services. Prior to that she had attended a roundtable with Michael S. Piwowar, former SEC commissioner gaining insights on transatlantic markets under President Trump.
- ESMA, Paris – Shaping the Future of EU Capital Markets: Niki listened to this year’s discussion on addressing capital market challenges to foster innovation and attract new capital in Europe., Adena Friedman was invited to comment on the recipe for growth and spoke about NASDAQ's commitment to using its technology to enhance efficiency which should, in turn, unlock capital.
January:
- Ben spoke at the London Business School’s London Blockchain Summit, showcasing blockchain's growing influence across diverse industries. Ben sat on a panel focused on the roadmap for regulations and its impact on blockchain investments and real-world applications.
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Thank You
Thank you for your continued support of ClearToken. We look forward to sharing further updates on our progress towards delivering the market’s first post-trade infrastructure for digital assets.
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Benjamin Santos-Stephens – CEO
ben@cleartoken.io
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