DTCC and ChainLink Complete Pilot Program, HKMA Enables e-CNY Payments

Market Commentary

  • U.S. equities are relatively flat as they consolidate above prior all-time highs. The SPX is trading at 5,300, and the NDQ is hovering near $18,600, while the DXY N/A% (-0.07%) is showing a slight decline, trading at $104.4. Crypto assets are showing strength, with BTC 0.96% rising 2.84% to $67.1k and ETH 0.00% surging 4.86% to $3,090. Liquid staking tokens are building on Ether’s outperformance, as LDO -1.23% and PENDLE -3.27% have gained 10.11% and 13.43%, respectively. Similarly, layer-2 tokens are displaying outperformance with OP -1.40% and ARB -0.25% both rising over 7% today.
  • Chainlink (LINK -0.99% ) and the Depository Trust and Clearing Corporation (DTCC) completed their Smart NAV Pilot, which leveraged Chainlink’s oracles to test a new way to process the net asset value of funds across different blockchains. The pilot included traditional financial institutions such as Franklin Templeton, BNY Mellon, Edward Jones, Invesco, and others. One of the key takeaways was that structured on-chain data combined with standard roles and processes could support a wide variety of tokenization use cases, such as bulk consumer smart contracts, brokerage portfolio applications, and additional benefits of real-time data and automated dissemination. The DTCC laid out its path forward, recognizing that Smart NAV could provide the foundational support for DTCC to leverage its clearing and settlement services within the digital asset industry while using Chainlink’s CCIP as an interoperability layer. They stated they see an opportunity to expand the scope of the pilot to explore further use cases beyond data dissemination. Following the positive pilot results, LINK -0.99% has gained over 17% in the last 24 hours. 
  • The Hong Kong Monetary Authority (HKMA) announced the ability for Hong Kong citizens to use digital CNY wallets for cross-border payments between Hong Kong and mainland China. The HKMA has been working closely with the People’s Bank of China (PBOC) to create an interoperable system between corresponding payment systems to increase efficiency and make progress on its G20 roadmap for cross-border payments. Users can set up wallets using their mobile phone numbers and do not need a Chinese bank account. The wallets leverage Hong Kong’s Faster Payments System (FPS) so people can add funds to their wallets via 17 retail banks in Hong Kong. e-CNY can be transferred to Chinese merchants, but person-to-person payments are not enabled yet. The HKMA is committed to creating further integrations of the digital CNY with mainland merchants to drive payment growth and support the mainland economy. As the HKMA enhances wallet functionality and users go through KYC verification, they also intend to explore corporate use cases. 

Technical Strategy

  • Avalanche has begun to show increasing signs of stabilization after having broken its sharp downtrend from the end of March. Recent support near $30 represented a nearly exact 50% absolute retracement from late highs along with lining up near prior lows from January which looked important technically. Recent churning near the lows has formed a bullish base not unlike what was seen in Solana last week ahead of its breakout, and a similar level for AVAX 1.60% lies near $40 which represents the neckline of this current one-month consolidation. Consecutive daily closes above $40 would signify the successful breakout of a reverse Head and Shoulders pattern, which should ignite a rally back to initial resistance near $44 and then $48 represents the 50% retracement of this Spring’s drawdown. Overall, AVAX looks like an attractive risk/reward ahead of its breakout and I suspect this week’s gains should lead prices back to challenge the $40 level in the week ahead.
DTCC and ChainLink Complete Pilot Program, HKMA Enables e-CNY Payments
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