EU, South Korea explore tokenization while Russia sets crypto limits

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TL;DR: As digital asset experimentation continues at a pace in jurisdictions across the globe, it’s becoming increasingly clear that there is no single approach emerging among regulators. The European Central Bank (ECB) is preparing to invest its own funds in tokenized securities while building infrastructure to settle them in central bank money, just as South Korea announces tests of blockchain-based deposit tokens for government payments. Meanwhile, in Russia, where a new digital asset regime is taking effect, the central bank is proposing new capital-based limits on banks’ exposure to cryptocurrencies and foreign digital instruments.

Key Takeaways:

ECB to invest in tokenized securities

On Monday, the ECB launched a project to gain practical experience with investments in tokenized securities and distributed ledger technology (DLT) by investing a small portion of its own funds in tokenized securities.

Initial investments will focus on euro-denominated securities issued by eurozone governments, regional governments, agencies, and European supranational institutions, with transactions to be settled in central bank money in the Eurosystem’s new settlement solution for DLT transactions, “Pontes.”