Digital Asset News: Banks entering crypto, inflation data, and a hardware wallet warning
Rob from Digital Asset News covers bank adoption of digital assets, inflation data, and a cautionary tale about hardware wallet security.
Summary
Rob from Digital Asset News covers several converging developments in the digital asset space. The central argument is that banks are not simply building private chains to exclude crypto natives — they need public blockchains for liquidity, interoperability, and access to crypto-native clients. He walks through moves by Standard Chartered, BNY Mellon, Citadel Securities, Russia's Sberbank, and Kraken's parent company Payward acquiring a European bank. He also covers the Canton Network's collaboration with BNY Mellon, Goldman Sachs, and the DTCC for tokenized money markets, and Solana's Alpenglow upgrade targeting 150-millisecond finality. On the macro side, CPI came in slightly above expectations at 3.7% year-over-year, and Fed Vice Chair for Supervision Michelle Bowman signaled no urgency for further rate action. The episode closes with a warning about a viewer who lost $200,000 after purchasing a Ledger hardware wallet from a third-party reseller.
Key Takeaways
FULL TRANSCRIPT
Post-Quantum Security Research Offers Reassurance
Rob: Looks like inflation and adoption are running pretty hot, and I did not have this on my bingo card — just how hard the different banks are going into the digital asset space. But before I get into that and talk about all those different things, I want to remind everybody that there's a lot of doomerism going around, especially with quantum computing and AI and how it's going to break everything. Just remember that if it's a problem that was started or caused by individuals or people, it can be solved by individuals and people.
This is a reference to that: researchers at Imperial College London proposed a framework for post-quantum private transfers on Bitcoin. Now, usually what this would take would be something like a soft fork, so we'd have to agree to that, or people wouldn't agree, and then you'd have different miners and node operators fighting over everything. They said no — we can do this right now. This was their academic paper. Is this the only way to go? No. But it just shows you that there are various ways to get to the finish line without everybody collapsing and having a bad time. So that's just a little bit of a nice reprieve as we go into the main story about adoption.
Why Banks Need Public Blockchains, Not Just Private Ones
Before we get into the banks — Standard Chartered, BNY Mellon, Citadel Securities, the tokenization aspects with Canton, Russia's largest bank getting into crypto, and Kraken buying a European bank — I need to make something clear, because I get this pushback a couple of times in the comments section. The argument goes: "Rob, it doesn't matter because the banks are just going to make their own private chain and they're going to exclude us as they've always done, and these permissionless public chains are going to go to the wayside and it's just going to be all permissioned walled gardens."
I think that's untrue. So the question is: why would a bank use a public blockchain? Because they're all about privacy, right? This wouldn't make any sense. There are four big reasons.
First: liquidity. We got here first and we created the whole infrastructure of what we have right now — DeFi, decentralization, permissionless blockchains. If they want to tap into that, they've got to play by the rules. And those are our rules. A private chain, if you look at it, is like an island — it's only approved for clients of that particular bank. As a reminder for global liquidity, we are not a small market. In the grand scheme of things, yes, we're very small compared to real estate and total equities and things like that — we're probably around three trillion. But Ethereum and Solana just by themselves hold $160 billion in stablecoins, plus there are billions in tokenized funds. There's a liquidity pool they want to tap into, and it's not going to be all permissioned. It doesn't make sense.
Reason two: you have to meet crypto natives. Crypto firms, digital asset funds, and DeFi don't live on bank networks. To sell them tokenized funds, BNY has to meet them in the middle of where they're actually living. Also, if they want 24/7, 365 trading and they want to use the wallets, they've got to come over here. Approved wallets will trade directly 24/7, 365 — no waiting for BNY's internal ledger to clear every trade.
The big one, I think, is this: no multi-bank friction. Bank A's chain can't talk to Bank B's chain. So what are they going to need? They're going to need an intermediary — something in the middle to connect both of them, because two islands can't talk. A public chain is neutral shared ground for banks. I think that's a big deal, between reason four and reason one — liquidity and universal connectivity. That's why I think adoption is happening the way it is.
Standard Chartered Opens Direct Crypto Trading in the UAE
Standard Chartered has unlocked direct Bitcoin and Ether trading for affluent United Arab Emirates clients in the Middle East. The bank manages custody and settlement in-house via a closed-loop model, removing the need for separate crypto wallets. I thought it was interesting because they're going to be allowing everything that a bank does and giving those capabilities to clients. The debut is a global first for Standard Chartered, according to the bank, because it marks the first time it has offered crypto trading directly to wealthy clients. And of course, you start with the wealthy clients because they know what they're doing — they're accredited investors. Then you roll it out to everyone else and say, "Okay, the smart money did it, now come on over." That's what the banks do. That's why we got here first — we do it our way.
The bank will manage custody and settlement within its own ecosystem using a closed-loop model, meaning clients will not need separate crypto wallets or third-party trading platforms. So it looks to me like they're actually doing a custodial service. We'll see how that works out.
BNY Mellon and Citadel Securities Test Tokenized US Treasuries
BNY Mellon and Citadel Securities — one of the biggest institutions in the world — are testing tokenized US Treasuries to speed up Wall Street financing. The transaction shows how blockchain-based government bonds could help trading firms move collateral faster between settlement and financing.
I've got to tell you, this is why I think the current administration has embraced crypto. We can discuss the meme coins and things like that, but it was a smart move. If you want the dollar to retain relevance, you need buyers for US Treasuries — buyers for America's debt. And if you can do that in a faster way, like what BNY is doing here by tokenizing US Treasuries to speed up financing, so much the better. I like where things are going in this regard.
We also talked about how BNY Mellon is currently in talks with Kraken's parent company Payward on custody and tokenization infrastructure. So when you look at these banks, you can put together the little breadcrumbs and see that the banks are moving into our sector.
Canton Network: BNY Mellon and Goldman Sachs on Tokenized Money Markets
On the rails side, Canton has confirmed they'll be working with BNY Mellon. BNY Mellon and Goldman Sachs are launching a tokenized money market fund solution. I'm not going to go over all the details here, but just know that Canton is working together with BNY Mellon and Goldman Sachs for money markets. Not too bad.
We also talked about the DTCC and Canton. This is an altcoin, so if you want to tune this out because you're not an altcoin person, that's fine. But just remember that they're working with the DTCC — the premier post-trade market infrastructure for global financial services, operating from 19 locations around the world. The total value of transactions processed just in 2025 was four quadrillion, 728 trillion, 485 billion, 680 million, 75,444 dollars. And they're working together with Canton as it launches in October for more than 30 firms. That's a little beyond the scope of today's video, but worth noting.
Russia's Sberbank Gets Approval to Trade Crypto
On top of the other two banks, Russia wants to get into the game. Russia's largest bank, Sberbank, has secured approval to trade crypto. Sberbank plans to open crypto trading to all clients on December 1st — that's fast — and is already testing Bitcoin, Ethereum, and USDT trades in its app.
As they go through this, more banks are getting into it. The approval marks another step away from the central bank's 2022 proposal — in Russia — to ban domestic crypto exchanges and prohibit Russian financial intermediaries from handling crypto. They just did a 180 and said, "Nah, let's go the other way." A law that took effect September 1st instead creates a regulated market involving banks, brokers, exchanges, and digital depositories. And just a note to Congress: that's how it's supposed to be done. So if you could take a cue from Russia and get things done so we can move forward, that'd be great. But until that time, thank you SEC and CFTC for doing what Congress couldn't do.
Kraken's Parent Company Buys a European Bank
Sometimes it's not about the banks moving in — it's about our ecosystem moving out and saying, "You know what, we'll do what we have to do." Crypto exchange Kraken's owner is buying a European bank. Payward is buying Salo Bank, a Lithuanian-based, EU-regulated bank, as it looks to expand into traditional banking services such as lending, issuing cards, and loans.
Wouldn't that be something? You go into a bank, you have things in your checking account, and you say, "Hey, I'd like to buy some Bitcoin, I'd like to buy some Ethereum or whatever else." You do that, and then bills come up and you're like, "I need to pay for this, or I have an AI agent that needs some funding, so I also need Tether." And you'd just be able to do that through your bank instead of going through ten different things and different wallets. That, I think, is the future.
The co-chief executive of Payward from Kraken says: "One of the biggest things that our customers have been asking us is, 'I would like to get products and services and offerings similar to what I get with another bank.'" Exactly what we just talked about. The improvement is putting these assets on the same rails — cash, crypto, tokenized stocks, credit, loans — all under one system. Customers will be able to borrow and lend against their assets without selling. If you're into the hard money markets as far as loans go, it's quite lucrative — rates between 9 and 12%, and of course you collateralize that. But it is interesting what you can do with borrowing and lending. This would be easier than current systems and opens up the customer's ability to make money on their assets.
Solana's Alpenglow Upgrade Targets 150ms Finality
I like where things are going and I like how the chains are being used. I think this is why certain chains are upgrading, like Solana. Solana is going through the Alpenglow upgrade and it's targeting 150-millisecond finality. In my small sector of this space, I think to myself: why do they need to go so fast? And now it makes sense — because they want to tokenize assets, they want to get into the equity game, they want to make everything almost instantaneous. Makes sense.
The switch will replace Solana's existing validator voting system and remove vote transactions from blocks. That would be good because then we can actually see how much TPS they actually have, and it could sharply change headline transaction counts even if user activity stays flat. I thought this had already gone out, but I guess they were just testing, and it looks like the end of next week is when things will be rolled out. Congratulations, Solana holders — looks to be a pretty big thing.
Bank of America Fined $1.2 Billion for Money Laundering
Having talked about all those things about crypto getting into banks, we also have to realize that banks are the ones doing a lot of the illicit activity. I know a lot of people in Congress — and most importantly, Elizabeth Warren — would love to talk about how our space is just riddled with problems: terrorism, funding of those organizations, cartels, drugs, all these awful things. But hey, so do the banks.
Bank of America crashed over 8% as it was fined $1.2 billion for money laundering by the US Treasury. I'm not going to get into this. I'm just going to let you know that that's what happens. And I think for them, $1.2 billion is just a slap on the wrist — if that's the cost of doing business, they don't see a problem. So let them do all the money laundering they want to, and then we'll see if anybody in Congress brings that part up when they start accusing Bitcoin and all the different digital assets of being the worst for illicit activities. I just don't think that's true.
Inflation Comes in Slightly Above Expectations
Inflation is hot. I think everybody knows this by now. If you're on X, that's what everybody's been talking about — how incredibly awful inflation is. It's not that bad. It's just that we came in above what we thought we were going to do.
CPI last time was a 0.4% increase. The expectation was 0.6. We got 0.6. Core CPI was 0.3. The expectation wasn't particularly expected to go down — and I do know why. Core CPI takes out energy and fuel. So if we remove the different problems going on with Iran and the escalating cost of oil, it probably would go down, but it didn't. It stayed the same. CPI year-over-year: last reading was 3.4, then 3.6, went to 3.6 — it came in at 3.7. And then core CPI: last time was 2.4, they thought 2.5, it went to 2.6. So we can see that it is slowly inching its way up.
Fed Vice Chair Bowman Signals No Urgency on Rate Hikes
I found this interesting. Fed Vice Chair for Supervision Michelle Bowman delivered remarks in Bangkok on October 14th. The TL;DR is this: no urgency for rate hikes. Bowman states she feels no urgency for taking further action at this point. She emphasized that officials really need to take some time and understand how things will evolve following the Fed's last rate move. She went with a wait-and-see approach. She noted that the central bank has room to assess how financial markets and the broader economy adjust after the policy rate was raised by a quarter of a percentage point last time. So she's kind of dovish — not really much of a hawk.
Because of that, nobody is panicking. You've got the target rate probabilities showing a little bit of a hike possibility — it was around a 70/30 split, now we're looking at a 58/41 split. Before this it was almost 50/50. The next meeting is October 28th. We'll see if they raise rates, and then we'll have to assess whether this is already priced in. It might be, but we'll see. A lot of people think they're going to stay the course in October and then raise in December. We'll see how it goes.
Hardware Wallet Warning: Viewer Loses $200,000 Buying from a Reseller
Lastly, a ledger hack. I'm not going to read the full email I got, but the big thing is: somebody emailed me. They said, "Hey Rob, this is what happened. They bought a Ledger. Yes, it was from a third party — they're in Indonesia. That's the only way they could get it because Ledger doesn't ship there." He's saying, "I lost $200,000. My wife is in pieces. Approximately $200,000 is a significant portion of what I had worked to build over the years, and the experience has been extremely difficult to say the least." He talks about how he was just staring at the screen, couldn't believe it was gone.
Everybody's going to say, "Well, some people can't buy directly from Ledger. Some people have limited options." And then it becomes a situation where it seems like we're playing whack-a-mole. Not very comfortable with it.
As a subtle reminder: diversification of storage devices will help you, I think. I use Trezor, moving away from Ledger. You can do an ETF or IT Trust Custody. I just learned today — because someone had said, "Rob, if you go through IT Trust Custody, they only have one custodial service, which is Coinbase Prime" — and I was like, "Shoot, you're right." But I reached out to those guys and they said, "No, no — we use Fidelity Digital and Fireblocks. We have three custodial services." So I should probably remind people of that.
Q&A
Rob: Rebecca says, "Rob, can you get Simon Dixon to speak at the ITC conference?" I could ask — we'll see what happens.
On the Bank of America story, someone's pointing out the irony of Elizabeth Warren emerging from a private jet — similar to the Bernie Sanders situation where he was called out for flying private while talking about fossil fuels. His response was essentially, "I'm a senator, I have to get things done." That reasoning didn't land well.
On illicit finance: the overwhelming majority of all the crooks out there still use dollars. If you want to hide a transaction, there's nothing better than cash. Speaking from experience here in Puerto Rico — everybody works on the dollar. "Can I pay you with PayPal or Venmo?" No. Cash. You know why? Hard to track.
On Richard Heart being arrested: this is exactly what happens when you put all your personal business on the internet for the whole world to see. But it's not just that — it's about being fraudulent and steering your followers into a disaster. When you lie to people, there are consequences. Richard Heart was arrested by Istanbul police in Turkey.
On the Ledger situation: never buy from resellers. Some countries have limited options — Hong Kong, Vietnam — it's a big pain. I'll tip my hat to Plan B, who said he transferred everything to a Bitcoin ETF. His point was, "I don't have to worry about a hack." But the market's a funny thing. We're not expecting any hacks to go through these custodial services. We're hoping there are no hacks at Coinbase Prime, Fireblocks, or Fidelity Digital. But what if it does happen? What if somebody's able to hack into it using AI with some kind of sophistication and the ETFs can't pay things back? If that happens, watch the crypto market collapse just like it did when FTX, Celsius, Voyager, and BlockFi went down the tubes. So let's hope they've got really good security and are on top of things.
On KuCoin: someone mentioned a Twitter post about victim funds being transferred there. KuCoin is essentially what Elizabeth Warren is talking about when she raises concerns about exchanges. People say, "I use KuCoin, it's fantastic." I'm sure it is. But if you're looking for some unusual transactions, you'll find them there. You can track all the transactions — a lot of them go through there.