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We construct an empirical measure of spread (EMS) to capture the dynamics of quoted CDS spreads to derive a refined negative CDS-bond basis trading strategy. and find that the EMS can explain the movement of near future CDS spreads.

Decentralized derivatives exchange Opium has introduced credit default swaps (CDS) on Tether (USDT). In this case, a sharp drop in USDT's price from the usual $1 is used as a proxy for Tether turning out to be insolvent. So if the token fell to 70 cents, the writer of the contract would pay the buyer 30 cents at maturity. The CDS seller provides insurance through posting collateral in USD Coin (USDC), which is locked in a smart contract until maturity of the CDS contract. https://trade.opium.exchange/derivatives

ISDA has published the sixth in a series of legal guidelines for smart derivatives contracts. These guidelines provide high level background on the CDS market; identify opportunities for the potential application of smart contract technology to CDS; and highlight important issues for technology developers to consider when designing technology-enabled solutions for trading and processing CDS and associated processes. These guidelines also highlight areas where further industry collaboration will be required to identify existing areas of legal and regulatory uncertainty and to develop solutions.

China Construction Bank (CCB) launched the sale of $3 billion worth of debt on a blockchain. The bond will be sold in the form of three-month certificates of deposits (CDs), which are usually sold at several tens of thousand yuan each and attract mainly professional investors or other banks. They are often used for interbank funding, specifically for small to medium-sized banks in China. By tokenising CDs on blockchain, retail investors can effectively buy the securities in small amounts (minimum of $100).

"For stablecoins to flourish as widely used payment vehicles they require a proper regulatory framework. A good starting point is to adhere to the principle of "same risk, same activity, same regulation." Another worthwhile principle is to not recreate the wheel. With this in mind, this Commentary offers some suggestions as to how stablecoins and their issuers could be regulated using the existing regulatory frameworks that are applied to retail payments-system providers and deposit-taking institutions. These existing frameworks include the Bank Act, its provincial statutory counterparts, and the relatively recent Retail Payments Activities Act. We paraphrase the Financial Stability Board's high-level recommendations for global stablecoins - many of which apply in a domestic setting as well - and assign the legislation/recommendations/authority based on the Canadian context." [Jeremy Kronick & Mark Zelmer, CD Howe]

"Only a lawyer could wholeheartedly believe a complex business problem can be solved by making contracts more convoluted. But that is what has been happening in the US market for corporate credit derivatives."

Coinbase Pro has begun accepting inbound transfers of DOT, and trading will begin on or after 9am Pacific Time (PT) Wednesday June 16, if liquidity conditions are met.