Foresight Year-End Review: The Web3 Exploration Journey of Traditional Giants

Author: angelilu, Foresight News

Traditional giants can no longer ignore the rise of Web3. As companies that have gained the most resources in their respective fields and are most capable of exploring the mysterious Web3 world, they are beginning to explore directions that can connect with their own businesses, from DeFi, NFTs to the metaverse.

Every time a new giant enters this emerging field, it adds a layer of endorsement to the Web3 domain, affirming the field while also challenging the still unstable crypto systems. The action routes of these giants represent large-scale experiments, which is also the purpose of this article, summarizing the actions taken by these giants in the fields of DeFi, crypto payments, NFTs, and the metaverse over the past year.

Progress of Financial Institutions in DeFi and Crypto Trading

MAS "Project Guardian"

Speaking of traditional institutions' pilot projects in the DeFi field, we must mention the Monetary Authority of Singapore (MAS), which launched "Project Guardian" in October this year. This is the first real-time transaction of tokenized deposits on a public blockchain by regulated large financial institutions. The pilot project completed a real-time cross-currency transaction involving tokenized Japanese yen and Singapore dollars with DBS Bank, JP Morgan, and SBI Digital Asset Holdings in November.

An article released by JP Morgan mentioned that the transaction used the Polygon network and employed Aave to adopt its "permissioned pool concept," issuing tokenized new dollar deposits and constructing an institutional wallet.

In addition, in November, the U.S. Patent and Trademark Office approved the trademark registration for JP Morgan's virtual payment wallet "JP Morgan Wallet," which can provide electronic transfers of virtual currencies, financial transactions; cryptocurrency payment processing; virtual payment account creation, aggregation, financial risk management, and payment reference management; remittance services for the same currency, as well as high and low-value cross-border payment wire services.

Charles Schwab

In September, financial giant Charles Schwab, along with Citadel Securities, Fidelity Digital Asset, Paradigm, Sequoia Capital, and Virtu Financial, planned to launch the cryptocurrency exchange EDX Markets. EDX Markets will be led by CEO Jamil Nazarali, CTO Tony Acuña-Rohter, and General Counsel David Forman. EDX Markets began partial spot trading in November and will officially launch in January next year.

Nomura Holdings

Nomura Holdings' crypto subsidiary Laser Digital will launch a dedicated cryptocurrency trading platform in the first quarter of 2023, focusing on high-frequency trading, market making, and proprietary trading to cater to institutional clients, family offices, high-net-worth individuals, and hedge funds.

Goldman Sachs

Goldman Sachs conducted its first over-the-counter cryptocurrency trade with Galaxy Digital in March, using a Bitcoin non-deliverable forward foreign exchange option for the transaction. In April, Goldman Sachs launched a loan service using Bitcoin as collateral, and in June executed its first Ethereum non-deliverable forward contract trade, providing institutional investors with indirect exposure to cryptocurrency investments.

MoneyGram

Cross-border payment giant MoneyGram launched cryptocurrency deposit and withdrawal services on the Stellar network in June, creating a developer platform that allows more businesses (including wallets and service providers) both inside and outside the Stellar ecosystem to expand their functionalities and scope in integration with MoneyGram and the Stellar network.

BlackRock

Asset management giant BlackRock launched the blockchain ETF "iShares Blockchain and Tech ETF" in April this year, which began trading after application.

In August, BlackRock announced a partnership with Coinbase, where BlackRock's end-to-end investment management platform Aladdin provides crypto trading and custody services for its institutional clients through Coinbase's brokerage platform, Coinbase Prime.

In August, BlackRock launched a private trust focused on Bitcoin, providing spot Bitcoin risk exposure for U.S. institutional clients.

Citibank

In June, Citibank chose Swiss cryptocurrency custodian Metaco for digital asset custody, integrating the custody service with its securities services, initially focusing on tokenized securities, with stocks and bonds moving and settling using blockchain technology, and also planning to fully integrate Metaco's "Harmonize" crypto custody platform.

New York Fed Launches Digital Dollar Pilot

In November, the New York Federal Reserve launched a 12-week digital dollar pilot with about 10 Wall Street institutions, including BNY Mellon, Citigroup, HSBC, Mastercard, PNC Bank, TD Bank, Truist, Bank of America, and Wells Fargo. Additionally, the international payment system SWIFT will provide interoperable infrastructure. Deloitte will provide consulting services, and Sullivan & Cromwell LLP will provide legal advice.

Franklin Templeton

Franklin Templeton, an asset management giant with over $1.3 trillion in assets under management, offered two digital asset separately managed account (SMA) strategies through Eaglebrook Advisors in mid-October. One of the strategies, Franklin Templeton Digital Assets Core, is a market-cap-weighted strategy investing in 10 to 15 of the largest digital assets, excluding stablecoins and meme coins; Franklin Templeton Digital Assets Core Capped holds Bitcoin and Ethereum, each accounting for 25% of the portfolio.

BNP Paribas

BNP Paribas joined JP Morgan's blockchain-based fixed income market trading network Onyx in May this year and helped EDF ENR, a subsidiary of Electricité de France (EDF) focused on solar power plants, issue tokenized bonds on Ethereum in July. BNP Paribas also partnered with Swiss crypto custodian Metaco to enter the cryptocurrency custody space.

CME Group

The Chicago Mercantile Exchange (CME) launched micro Bitcoin and Ethereum options in March this year, followed by Bitcoin and Ethereum futures denominated in euros in August, and Ethereum options in September.

BNY Mellon

In March, Circle chose BNY Mellon as the primary custodian for USDC reserves. In October, it received approval from New York regulators to provide cryptocurrency custody services and has launched a digital asset custody platform in the U.S., developing Bitcoin and Ethereum custody services for select clients. In November, it participated in the digital dollar pilot with the New York Federal Reserve.

Fidelity Investments

Fidelity Investments launched two new Bitcoin ETP products (exchange-traded products) on the Swiss SIX exchange in March this year, and in April, it launched two exchange-traded funds (ETFs) targeting the crypto industry, digital payments, and the metaverse, namely the "Crypto Industry and Digital Payments ETF" (FDIG) and the "Fidelity Metaverse ETF" (FMET).

In April, Fidelity proposed allowing investors to open Bitcoin accounts in their 401(k) plans, which caused a significant stir. However, the U.S. Department of Labor expressed concerns about Fidelity's approach to allowing direct investment in crypto assets through 401(k) plans, citing the risks of fraud, theft, and significant losses associated with crypto assets. U.S. Treasury Secretary Janet Yellen also stated that adding Bitcoin to retirement savings is a very risky investment. On November 21, three U.S. senators wrote to Fidelity, urging it to reconsider its decision to allow 401(k) plans to invest in Bitcoin. This relatively aggressive idea proposed by Fidelity initially faced opposition from U.S. regulators and later encountered market volatility, leaving its formal launch uncertain.

In late November, Fidelity opened its crypto investment product Fidelity Crypto to retail customers. The company's Fidelity Digital Assets division had previously provided crypto investment products to institutional clients.

PayPal

Payment giant PayPal formed a cross-disciplinary advisory council on blockchain, crypto, and digital currencies in February this year. In June, PayPal added support for transferring, sending, and receiving crypto assets to external wallets and exchanges, obtained a full BitLicense from NYDFS, and launched a buy now, pay later feature called "Pay Monthly." In October, PayPal added passkeys as a login method for PayPal accounts. In December, PayPal partnered with ConsenSys, allowing U.S. users to purchase ETH from MetaMask using PayPal.

Traditional Giants' Layout in the Metaverse and NFT Fields

Meta

Meta's determination to explore the metaverse is evident from its resolute rebranding. This year, Meta has also invested time and effort in exploring NFTs, announcing plans to launch an NFT marketplace in January and introducing NFT features to Instagram starting in March. By May, NFT functionality was available for testing on Instagram, and by late June, Meta expanded NFT testing on Instagram and Facebook. In July, Facebook launched NFT features for select U.S. creators, with Facebook NFTs appearing under the "Digital Collectibles" tab on user profiles. In August, Meta supported the display of NFTs on Facebook, and in September, it allowed users to cross-post digital collectibles on Instagram and Facebook. In November, Instagram announced the launch of NFT minting and trading tools.

Additionally, in late June, Meta rebranded its payment platform Facebook Pay to Meta Pay, supporting the exchange of fiat and cryptocurrencies. Meta founder Mark Zuckerberg expressed the hope that Meta Pay could become a universal wallet for purchasing or creating all digital items in the metaverse, not limited to Meta's products.

Although its exploration of the metaverse is ongoing, Meta's second and third-quarter financial reports indicate that it is still in the early stages of exploration. Meta's metaverse division, Reality Labs, reported a loss of $2.8 billion in the second quarter and $3.7 billion in the third quarter, totaling a loss of $9.4 billion since the beginning of the year. However, Meta expects that the operating losses of Reality Labs will not continue to grow significantly next year.

TikTok

The international version of Douyin is also actively laying out NFTs. Last year, it collaborated with ImmutableX to launch TikTok Top Moments, allowing videos to be minted as NFTs for auction. In August this year, TikTok integrated with the music streaming platform Audius, based on Ethereum and Solana blockchains, enabling Audius users to easily upload music NFTs and share them on TikTok.

YouTube

The world's largest video site, YouTube, included NFT sales in its new creator tools launched in February this year, allowing creators to sell their content as NFTs. YouTube's Chief Product Officer Neal Mohan stated, "Web3 opens up new opportunities for creators. We believe that new technologies like blockchain and NFTs can help creators build deeper relationships with their fans."

Reddit

Reddit has always been one of the most active applications in the crypto community, and this year can be said to be its biggest step into crypto. In January, Reddit began testing NFT avatar features and announced in March that it was hiring multiple engineers for its crypto team and NFT platform. In May, Reddit established Reddit X, dedicated to building new features such as blockchain. In July, it announced the launch of an NFT avatar marketplace. In August, it airdropped "Collectible Avatars" based on Polygon to select users. As of the time of writing, the minting volume of this NFT has exceeded 6.76 million.

eBay

E-commerce giant eBay has also been exploring the NFT field this year. In May, it partnered with the NFT platform OneOf to launch a series of NFTs themed around hockey player Wayne Gretzky. In June, it acquired the digital art and rare NFT discovery and trading platform KnownOrigin and submitted trademark applications related to NFTs, NFT trading, and NFT or virtual goods markets.

Samsung

In January this year, Samsung opened a limited-time metaverse flagship store "Samsung 837X" in Decentraland. In March, it collaborated with the blockchain service platform PlayDapp to launch the Everland metaverse, integrating the NFT trading platform Nifty Gateway into its smart TVs. In June, it launched the official Samsung US Discord server to delve deeper into the Web 3.0 space; it introduced the Samsung Wallet, which can store and access digital IDs and digital passwords, and integrated the Samsung blockchain wallet. In December, Samsung established a special task force for XR device research and development, potentially launching XR devices next year, continuing its layout in the metaverse.

Sumitomo Mitsui Financial Group

Japan's Sumitomo Mitsui Financial Group (SMBC) has partnered with Japanese Web3 startup HashPort to develop an ecosystem around Web3 and NFTs, including promoting Web3 in Japan. Under this collaboration, Sumitomo Mitsui Bank will pilot the issuance of SBTs, using soulbound tokens (SBT) for identity verification.

Visa

Visa began collaborating with crypto companies to launch crypto payment cards as early as 2018, continuously increasing the number of its partnerships. However, this year, driven by the NFT craze, Visa has started to explore the NFT field in addition to crypto payments. In March, Visa launched a Creator Program to help digital artists, musicians, fashion designers, and filmmakers conduct business through NFTs. In November, Visa, in collaboration with Crypto.com, launched the World Cup-themed "Visa Masters of Movement" series of NFTs.

TIME Magazine

TIME magazine released its first fully decentralized magazine "The Prince of Crypto Has Concerns" on the blockchain in the form of an NFT on March 23.

AMC

The largest cinema operator in the U.S., AMC, issued exclusive "I own AMC" NFTs to over 580,000 shareholders who registered through the AMC investor portal in January this year. Additionally, in March, AMC began accepting payments using DOGE and SHIB through BitPay. The AMC mobile app for U.S. cinemas supported online payments using DOGE, SHIB, and other cryptocurrencies in April.

Nike

Nike China launched a digital collectibles campaign on its Tmall flagship store in April this year, introducing five digital collectibles. That month, it released the first Nike NFT sneaker collection RTFKT X Nike Dunk Genesis CRYPTOKICKS in collaboration with RTFKT Studio. In November, Nike announced the launch of the Web3 wearable platform .Swoosh, and in December, Nike's crypto fashion brand RTFKT will launch the Web3 smart sneaker "Cryptokicks iRL."

Adidas

Sports brands like Adidas are also adopting NFTs for brand marketing. Adidas Originals collaborated with Prada to launch NFT artworks in January this year and launched the NFT wearable series Virtual Gear in November, allowing users to create derivative works based on BAYC, MAYC, or Inhabitants NFTs.

Prada

In addition to its collaboration with Adidas, Prada launched 100 Prada Timecapsule NFTs on June 2, and in December, it released a new Timecapsule NFT series that includes physical clothing, with NFT holders receiving a limited edition sweater.

Domestic Digital Collectibles

Internet giants like Alipay, Tencent, ByteDance, Baidu, JD.com, Bilibili, and Xiaohongshu have been laying out digital collectibles since last year. Xiaohongshu's layout in the Web3 field is more inclined towards Web3 social, launching the digital art platform R-SPACE. Alibaba and JD.com use NFTs as a vehicle to assist major brands in accelerating product sales, traffic, and growth among young consumers through a "physical goods + digital collectibles" marketing approach. Hong Kong-listed live streaming platform INKE announced in June that it would be renamed "Ying Universe" and officially announced its metaverse project Hoot Labs, also issuing NFTs ------ INKEPASSNFT overseas. Momo and Huajiao have also been reported to be issuing NFTs overseas. In June this year, Dewu launched a digital collectibles platform and released the first round of NFT avatars, Sneakercube, allowing users to obtain NFT avatar blind boxes through a lottery.

However, the boom of digital collectibles in China has been fleeting. In August 2022, the total number of domestic digital collectibles platforms exceeded 1,000, with more than 25 backed by listed companies. After Tencent's Huanhe closed in August, 37 digital collectibles platforms had voluntarily issued withdrawal announcements by November, with only three providing full refunds, while the refund ratios for others typically ranged from 5% to 50%. The domestic digital collectibles leader iBox also announced that its international version would cease operations on December 31.

Summary

In addition to the giants mentioned above, social giant Twitter has also been a focal point this year. As the most frequently used social tool in the crypto community, Twitter was acquired by Elon Musk, who is also a deep player in the crypto space. After a tug-of-war in this acquisition battle, Twitter integrated cryptocurrency prices into its search results using the TradingView plugin in December, and we can expect Twitter to launch more crypto-related features in the future.

Traditional giants are entering the Web3 field with varying degrees of intensity and modes; some are making bold transformations, some are proceeding cautiously, and others are merely using the Web3 hype for a wave of brand promotion without creating further ripples. Only those giants that sincerely embrace Web3 can contribute to building the new world of Web3.