News Roundup — Europe's Fourth Largest Investment Manager Discloses $500M in Spot Bitcoin ETFs Amid Market Volatility

Major news stories this week;

1. Europe's Fourth Largest Investment Manager Discloses $500M in Spot Bitcoin ETFs Amid Market Volatility
2. Canada Sets Strict CIRO Compliance Deadline for Crypto Trading Platforms
3. Stripe and Bitstamp to expand crypto on-ramp in Europe
4. Xapo Bank to offer 1% yield on Bitcoin in UK
5. Reserve Bank of India: CBDCs may reduce availability of cash deposits with banks

Story Summaries;

1. Capula Management, Europe's fourth-largest investment manager, has disclosed holdings of nearly $500 million in spot Bitcoin ETFs, as per an SEC filing today. The firm reported owning $211 million in Fidelity's spot Bitcoin ETF (FBTC) and $253 million in BlackRock's spot Bitcoin ETF (IBIT), totalling $464 million. Capula's significant investment in Bitcoin ETFs reflects a further growing acceptance of Bitcoin among traditional financial institutions. This investment aligns with a broader trend of institutional adoption, as more firms seek exposure to the potential upside of BTC. The SEC's approval of spot Bitcoin ETFs has made it easier for institutions to invest in Bitcoin, providing a more accessible and regulated vehicle for participation in this burgeoning market.
2. Canada-based crypto trading platforms (CTPs) are facing tight regulatory deadline from the Canadian Investment Regulatory Organisation (CIRO). The crypto operators are required to comply with the deadline to complete their applications to receive an investment dealer status. The Canadian Securities Administrators (CSA) has “reminded” CTPs to adhere to CIRO membership requirements, ensuring regulatory alignment and customer protection. In 2021, the CSA and CIRO detailed that CTPs were allowed to operate as restricted dealers for temporary period. During the period, they would offer services, while seeking for fully authorised CIRO membership. However, as the transitional period comes to an end, the regulators in Canada have stipulated deadlines for crypto platforms to move from restricted dealers to fully-authorized.
3. Payments processor Stripe has joined forces with crypto exchange Bitstamp to to enhance EU crypto access and enable seamless fiat-to-crypto conversions. Stripe offers a customisable widget that developers can embed into their product to allow conversion of crypto and instant settlement of transactions. It currently supports multiple cryptocurrencies, including bitcoin (BTC), Ethereum (ETH), Solana (SOL), Stellar (XLM), and USD Coin (USDC). The widget won't be available to UK customers, according to the press release. Bitstamp will help Stripe manage fiat-to-cryptocurrency conversion and transfers to consumers. This, in turn, will expand the crypto exchange’s Bitstamp-as-a-service product, the white-label version of its crypto trading services to banks and fintechs.
4. Xapo Bank, a Bitcoin-focused institution, has announced its expansion into the United Kingdom, according to an Aug. 5 statement shared with CryptoSlate. The firm stated that the move makes it the first licensed bank in the UK to offer a combined interest-bearing account for fiat and Bitcoin. The expansion follows the successful transfer of Xapo’s banking license to the UK under the “passporting” scheme. This framework, facilitated by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA), allows firms from Gibraltar to extend their operations into the UK. Xapo’s new offering enables customers to transfer up to £1 million (about $1.275 million) to UK wallets and bank accounts.
5. While central bank digital currencies (CBDCs) can open up a world of new opportunities, they can also reduce bank deposits, affecting the credit-creating capacity of commercial banks. “As deposits are a cheap and stable source of funding for banks, substitution of bank deposits with CBDCs could impact banks’ overall funding, and ability to lend,” the Reserve Bank of India (RBI) said in its report on currency and finance. “CBDCs could also impact the commercial bank reserves at the central bank and open market operations,” the central bank pointed out. The RBI started its first digital rupee pilot in the wholesale segment on November 1, 2022, while the retail digital rupee pilot began on December 1, 2022. As of June 2024, 5,000,000 (fifty lakh) users and 420,000 (4.2 lakh) merchants are participating in the CBDC retail pilot.

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And that’s all for last week’s news! Wishing you a great week ahead!

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