Paxos CEO on tokenization, regulation, and the future of finance

Clearstream D7 just went live in Luxembourg. Tokenised issuance is now possible for everyone. For years, Luxembourg has built its reputation as a trusted financial centre. Now, we see the next step: tokenisation in mainstream finance, not theory-production. Here is what has changed in the last two weeks: - Multi-currency digital bonds have settled in tokenised central-bank money. This reduces settlement risk at the highest level. - IOSCO issued new guidance. Standards are set for legal certainty, custody, and key management. - Clearstream D7 now supports tokenised commercial paper and MTNs-directly through international-grade infrastructure. What does this mean? - Faster issuance for commercial paper and MTNs. Treasurers get liquidity with fewer barriers. - Money-market funds can update registers quickly. Checks and audits become simpler. - The UK is writing rules for tokenised fund registers. Luxembourg has a clear example for fund innovation. More support is now local. Deloitte Luxembourg launched a Digital Asset Accelerator Centre - Thomas Campione, CFA - Financial institutions have a trusted partner for building tokenisation projects. The regulations are clear. For leaders in finance, operations, and legal in Luxembourg, the message is simple: The framework is set. The technology is active. Build partners are ready. Tokenised finance is now in reach for all institutions-not in the future, but today. How do you see tokenisation changing Luxembourg’s financial sector? Mathieu Cottin Patrick Hennes Brice Vandevoorde Angel Luis Salas Peso Tobias Seidl Catherine Gotti Petra Krizan Laszlo Muranyi Dr., MBA Tommaso Cervellati, MBA, CAIA Christian Stricker Francis Jacquemain Algimantas Taujanskas Giovanni Campodall'Orto Natalia Galkina Geethika Loku Kodikara Arachchige Stipe S. Aymeric Mechelany Anetta Proskurovska

As tokenization extends from private companies to public assets and capital markets, governments play a central role. A national tokenization framework involves legal, regulatory, and infrastructural measures that enable assets — public debt, state-owned enterprise shares, corporate securities — to be represented digitally, traded efficiently, and accessed globally. For states aiming to position themselves at the forefront of digital finance, building such frameworks is a strategic imperative. https://lnkd.in/dX4KK9-W

As tokenization extends from private companies to public assets and capital markets, governments play a central role. A national tokenization framework involves legal, regulatory, and infrastructural measures that enable assets — public debt, state-owned enterprise shares, corporate securities — to be represented digitally, traded efficiently, and accessed globally. For states aiming to position themselves at the forefront of digital finance, building such frameworks is a strategic imperative. https://lnkd.in/dM8CxGNg

Happy to see our ESRB crypto-assets and decentralised finance report published today! The European Systemic Risk Board (ESRB) has published a report on three issues central to the crypto-asset ecosystem: stablecoins, crypto-asset investment products and multi-function groups. - Global stablecoin market capitalisation has more than doubled since the ESRB’s May 2023 report. This growth is partly driven by US crypto policies promoting the adoption of US dollar-denominated stablecoins. Stablecoins and traditional finance are increasingly intertwined, including through reserves backing their pegs held at commercial banks. Accordingly, the report emphasises the need to ensure that eligible reserve assets in the EU are of high-quality and liquid. - The report also notes that crypto-asset investment products are becoming increasingly accessible to institutional and retail investors. The crypto-services market is highly concentrated, especially for custodians, thus increasing spillover risks into traditional finance, while most crypto-investment product issuers are based outside the EU. Information gaps (namely on leverage by financial institutions and trading platforms; NBFIs’ crypto holdings and interlinkages with the crypto sector; and counterparty risks across crypto‑investment products, derivatives and services) limit the analysis of the financial sector’s exposure to crypto risks. - In multi-function groups, crypto-asset products and services are offered by entities belonging to the same group as other financial and non-financial firms. Such groups may operate with opaque corporate structures and engage in cross-border regulatory arbitrage. This can pose challenges for effective supervision, particularly when the groups are based outside the EU. The report therefore calls for formal supervisory cooperation mechanisms and group-level reporting requirements. Finally, the report details the financial stability risks posed by stablecoins that are jointly issued by EU and third-country entities. First, a run could prompt holders to redeem from the EU issuer putting strain on its reserves, delaying redemptions and amplifying runs within the bloc. Second, restrictions imposed by third-country authorities on the transfer of reserves between jurisdictions could exacerbate these risks during periods of stress. The Markets in Crypto-Assets Regulation (MiCAR) does not explicitly envisage the joint issuance of stablecoins by EU and third-country entities and therefore cannot address the associated risks. In light of these findings, the ESRB General Board has adopted a Recommendation on third-country multi-issuer stablecoin schemes (ESRB/2025/9), given the risks identified, market dynamics and limitations of the current legal framework. Press release: https://lnkd.in/dzbYcUNE

Australia was once an early adopter in financial innovation. Now, its own regulator says it’s falling behind. In a landmark speech, ASIC Chair Joe Longo warned that Australia must “seize the opportunity or be left behind” as tokenisation reshapes capital markets globally. The message was clear: the world is tokenising faster than we’re regulating. Longo called tokenisation the next phase of market evolution — capable of breaking assets into smaller, tradeable units and enabling instant settlement. The numbers speak for themselves: Switzerland’s digital exchange has surpassed $3.1B in tokenised bond issuances since 2021. J.P. Morgan plans to fully tokenise its money market funds within two years. Nasdaq aims to launch 24-hour tokenised securities trading by late 2026. Meanwhile, Australia risks becoming, in Longo’s words, “the land of missed opportunity.” Once known for pioneering electronic trading systems, Australia’s market leadership is now under pressure. While other nations integrated tokenised bonds, funds, and securities into their capital markets, Australia’s regulatory framework remains slow to adapt. That’s about to change. Longo announced that ASIC will review and relaunch its Innovation Hub — designed to open communication between regulators and innovators, supporting fintech growth rather than blocking it. The plan: An open-door policy for startups facing licensing or compliance hurdles. Collaboration with Treasury’s proposed crypto exchange licensing law. Alignment with ASIC’s new digital asset guidance, classifying stablecoins, wrapped tokens, and tokenised securities as regulated financial products (transition period until June 2026). It’s the beginning of a new phase — not of deregulation, but of regulated acceleration. Here are the BD takeaways for Web3 teams: - ASIC’s direction means tokenised funds and digital securities will soon need full compliance infrastructure. Teams who prepare early will become the default partners for institutions. - The new Innovation Hub is an open door — BD leaders should engage now, offering input and pilot proposals to shape Australia’s tokenisation framework. - Learn from Switzerland’s bond pilots, J.P. Morgan’s tokenized MMFs, and Nasdaq’s 24/7 trading push. Success in Australia will come from adapting those playbooks to local regulation. - Every asset class — bonds, funds, commodities — is being rebuilt as data. BD teams need to reframe products around on-chain liquidity, compliance, and interoperability. Australia’s financial future now hinges on whether it can match innovation with regulation. The world isn’t waiting — and the infrastructure for tokenised markets is already being built elsewhere. This isn’t about catching up to crypto. It’s about catching up to the future of finance. Will Australia reclaim its leadership in market innovation — or will tokenisation become another opportunity it watches from the sidelines?

“What’s Coming Next” Over the last few years, ASE-PAC has been working quietly on one of the most important economic initiatives of the next decade — a sovereign-grade financial system designed to strengthen the Western Hemisphere. What’s coming next is bigger than a digital asset, bigger than a payment network, and bigger than any single institution. It is the foundation of a new financial era. Honos Coin → The Transactional Engine Built for 3B+ daily microtransactions, dual-trust verification, PPP stabilization, and ultra-low energy settlement. The Sovereign Gold Platform → The Institutional Layer A Title-17 compliant financial architecture engineered for governments, major payment networks, strategic allies, and the next generation of capital markets. Together, they form: 📌 The sovereign-grade financial platform of the Western Hemisphere 📌 A system to restore PPP fairness for global consumers and businesses 📌 A trust-verified transactional infrastructure for governments & institutions 📌 A Western economic shield in an increasingly competitive geopolitical environment What We’ve Built Quietly (Until Now): ✔ Dual-trust identity + settlement mechanics ✔ PPP-aware pricing architecture ✔ AI-driven trust layers ✔ Integration of Honos into SGP infrastructure ✔ SEC 506(c) compliance foundation ✔ Institutional re-listing path for Honos ✔ Expansion from regional to global micro-transaction rails This is infrastructure, not speculation. Infrastructure that supports economies, communities, and national competitiveness. What Happens Next ASE-PAC is advancing a major initiative with the potential to impact: Governments Payment giants (Visa, Mastercard, Amex) Global money transmitters National digital identity systems Cross-border trade routes Institutional banking and liquidity systems This project positions the Western Hemisphere for economic resilience at a time when the global financial landscape is changing rapidly. The Raise: Institutional Only We are preparing a $1B strategic raise, limited to 10–15 institutional investors aligned with long-term economic and geopolitical stability for the Western Hemisphere. This is one of the most significant institutional opportunities since: 🚀 SpaceX 🌐 Google 💻 Microsoft More details will be released on this page as we move into the next phase. ASE-PAC is preparing something historic. This is just the beginning. — ASE-PAC American Strategic Economic PAC Economic Security • Sovereign Finance • Western Competitiveness

Digital Assets Now Officially Financial Products in Australia The Australian Securities & Investments Commission (ASIC) has confirmed that many digital assets will be classified as financial products and be subject to Australia’s financial-services laws. 📌 Key takeaway Digital tokens, previously viewed as new-age or “crypto” instruments, are now firmly in regulatory territory alongside equities, bonds, and derivatives. 📊 Why this matters Platforms offering digital assets must meet compliance and licensing standards, similar to broker-dealers. Digital-asset issuers and intermediaries will face stricter disclosure, governance, custody and risk-management obligations. Investors gain enhanced protection: Know-Your-Client (KYC), Suitability, Anti-Money-Laundering (AML) frameworks will apply. The move signals that regulators are closing the gap between traditional finance and digital-asset innovation. 🎯 For finance professionals and compliance teams This is a call to action: review your structures — especially if you engage with digital-asset products or platforms in APAC. Update your risk-frameworks: custody arrangements, resilience testing and disclosure standards now become essential. Expect more cross-border regulatory alignment as jurisdictions follow suit. 🌏 Bottom line Australia’s step forwards a clear message: digital assets aren’t “wild west” anymore. They’re now governed financial products — and firms must treat them accordingly.

Great to see #CDM recognised as a cornerstone of smarter finance For over 5 years, the securities finance industry—through #ISLA, #ISDA, and #ICMA - has built a common digital standard - now open source and ready to drive innovation and interoperability. Whatever the future architecture is, two things are clear: 1) Standards aren't optional, they're the foundation of progress. 2) Effective standards must reflect the market's best practices. https://lnkd.in/eDrc_smx

Decentralized Finance (DeFi) is undergoing a transformative evolution, driven by innovative concepts that are changing the landscape of investment and financial autonomy. A pivotal development in this space is the emergence of real yield, which is reshaping how investors approach their strategies. This new paradigm not only offers genuine returns but also enhances the sense of financial freedom for individuals participating in the DeFi ecosystem. As we delve into the implications of real yield, it’s clear that it represents a significant advancement in the way we utilize and think about our financial resources.