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Grayscale has incorporated six more trusts, tied to Polkadot (DOT), Aave (AAVE), Monero (XMR), Cardano (ADA), Cosmos (ATOM), and EOS.IO (EOS). All the six trusts were formed Wednesday by Delaware Trust Company, Grayscale's "statutory trustee." The new trust formations come a week after Grayscale incorporated [six more trusts, including those tied to Chainlink (LINK) and Tezos (XTZ) tokens]. However, trust formations do not mean the firm will launch these products.

BlockFi launched its new Bitcoin Trust that was registered with the US Securities and Exchange Commission (SEC) late last month. The Trust will issue shares through private placements, and the value of the shares will reflect the value of BTC held by the trust (minus expenses and other liabilities). Initially, trust shares will be made available to global institutions and other qualified investors. Later on, access will be expanded to include accredited individual investors in the United States. https://blockfi.com/the-blockfi-bitcoin-trust-offers-a-new-way-to-invest-in-bitcoin

The IMF published a paper on the role of limited trust among counterparties in dysfunctional cross-border payment systems. Interoperability between different forms of money can thus be conceptualized as the network of trusted links necessary for transactions. Traditionally, across borders, trust links involve exclusive bilateral credit relationships among correspondent banks. However, the fixed costs required to build these links foster an expensive and concentrated system. This paper interprets different payment arrangements in terms of the implied trust structures. It discusses how the tokenization of money alters trust links and allows for a potentially more efficient market structure to exchange money. The paper ends with a suggested global marketplace to trade tokenized money directly across borders.

"BitGo obtained a New York Trust (becoming a New York Limited Liability Trust Company) from New York Department of Financial Services (NYDFS) to operate as an independent, regulated qualified custodian under New York State Banking Law. The Trust Charter enables BitGo to provide custodial services for New York clients who need to secure large amounts of digital assets with designated entities that offer the highest level of security, regulatory oversight and operational efficiency. Additionally, a New York Trust Charter allows a company to provide custodial services in many other states without obtaining additional licenses. To date NYDFS has only approved a handful of Trust Charters for companies engaged in virtual currency business activity, including Gemini, Coinbase and Paxos."

"Zero-knowledge schemes have recently become a popular attempt to offer users privacy in an attribute-based credential system. In this article, we do not contest the mathematics of these schemes; we assume it is logically sound. Instead, we draw attention to the trade-off that is made when employing cryptography instead of trusted parties to protect user privacy. We assert that, for these approaches to create the trust required by credential verifiers, they must introduce mechanisms that limit their utility and create significant privacy risk to the user that cuts against data minimization goals. Greater trust must be placed in the shelf life of cryptography to prevent the user from being unwantonly correlated than alternative approaches. Just as we would discourage storing encrypted private data on public blockchains, we discourage this approach here. Lastly, this article introduces the concept of a trusted witness which provides privacy for honest users and solves the privacy-trust problem without the disadvantages of the zero-knowledge approach."

BlackRock launched a new private spot Bitcoin (BTC) trust. The fund is only available to U.S. institutional investors and seeks to track the performance of Bitcoin, less the expenses and liabilities of the trust. Private investment trusts that do not solicit investments from retail investors do not need to register with regulatory authorities in the United States. But others, such as the Grayscale Bitcoin Investment Trust, can still become publicly traded (though not SEC-registered) on the over-the-counter markets.

Adoption of CBDCs can be fostered through multiple approaches. While the strategy may differ, two fundamental components should remain as the foundational pillars of CBDC launch: trust and transparency. The adoption of CBDC will rely on central banks' ability to address privacy concerns effectively and ensure individual's rights are protected. The issue of privacy surrounding CBDCs is closely tied to the public's trust in public institutions, which is why commercial banks could play a crucial role. As trusted partners of the public, commercial banks can help promote CBDC adoption by offering assurance regarding the safety and security of CBDC holding. Not limited to trusted partners, commercial banks will also have an active role in CBDC adoption. Finally, it is essential to consider both end-user and merchant perspectives when evaluating CBDC adoption. Merchant and public adoption are two sides of a coin, being interconnected and interdependent.

The Quarterly Journal of Economics (QJE) published a paper by Eric Budish that shows that Nakamoto's novel form of trust is deeply economically limited. A zero-profit condition on the quantity of honest blockchain "trust support" (work, stake, etc.) and an incentive-compatibility condition on the system's security against majority attack together imply an equilibrium constraint which says that the "flow" cost of blockchain trust has to be large at all times relative to the benefits of attacking the system. This is extremely expensive relative to traditional forms of trust and scales linearly with the value of attack. The paper's analysis is consistent with the continued use of cryptocurrencies and blockchains for black market purposes, and more generally in use cases where users are willing to pay the high implicit costs of anonymous, decentralized trust. See also: https://www.linkedin.com/pulse/slow-blockchain-mathematical-certainty-patrick-mcconnell/

Funnily enough, the core point I keep returning to is that you need trusted intermediaries to allow people who don't trust each other to trade. And that is what banking does. Banks exist as regulated and licensed institutions to ensure you can trust them to transfer funds without losing them. That's it folks. That's what it's all about and crypto is learning this, just as every FinTech does. Banks exist for a reason, are regulated the way they are for a reason and operate the way they do for a reason. And that reason is all about trust.

Osprey Fund's bitcoin trust is now available to retail investors via the over-the-counter (OTC) market. The fund was formed two years ago, and Osprey applied to register the trust with the U.S. Securities and Exchange Commission (SEC) in the middle of last year. This fee structure makes the fund cheaper than Grayscale Bitcoin Trust but more expensive than other new funds like CrossTower's master-feeder bitcoin fund.

Matt Taibbi asks some tough questions about the sanctity of the reserve assets that back Circles USDC stablecoin, and the issue of bankruptcy remoteness. Circle is unlike some competitors, whose user agreements specifically spell out that reserves are, say, "fully backed by US dollars held by Paxos Trust Company, LLC," or "custodied pursuant to the Custody Agreement entered into by and between you and Gemini Trust Company, LLC." Those describe trust agreements, which are truly bankruptcy remote. However, Circle is not a trust, so customers  are guarded only by protections afforded under state money transmission laws. However, Circle is only regulated  as a money transmitter in the states where Circle has licenses, and the firm has obtained licenses only in those states were licenses are required. There are other reasons to be concerned as a USDC hodler, and I recommend reading the whole post.

Crunchfish published a paper that argues that virtual secure elements (SEs) provide better security to retail CBDC offline platforms than hardware-based SEs. It says that hardware-based SEs are less secure due to the separation from payment app that breaks the chain of trust between the two communicating endpoints. This can result in potential attacks by replacing either endpoint with malicious ones or tampering with them and modifying their behavior during runtime. As the hardware-based SE does not have full visibility of the payment app and the mobile operating system (OS), it cannot determine the identity of the app or whether the app has been tampered with, and must "blindly" trust the OS and the app. A trusted client application for offline payments implemented in an app-integrated virtual secure element, on the other hand, has no trust gap issues and runs securely even on rooted/jailbroken mobile devices.

"Last week the Financial Services Agency (FSA) presented some ideas relating to cryptocurrency and stablecoins to the Financial System Council Working Group on Payment Services. The FSA is reluctant to allow banks to issue stablecoins other than trust banks. For trust bank issued stablecoins, it wants to relax the reserve requirements which currently require all assets to be held in bank demand deposits. However, it also wants to impose the travel rule, requiring KYC for trust bank issued stablecoin transfers."

A Bank for International Settlements (BIS) paper reports on a recent survey of US households, finding that they say they are more likely to trust traditional financial institutions than government agencies or fintechs (and especially bigtechs) to safeguard their personal data. Respondents from racial minorities have less trust in financial institutions, while younger respondents trust fintechs relatively more. Female, minority and younger respondents are more concerned about implications of data-sharing for their personal safety.

A key feature of Grayscale trusts is that there is no way to redeem the underlying crypto, at least for now. So when BTC or ETH is deposited into the trusts it stays there indefinitely. The lack of redemption options plus high institutional demand has created an interesting side effect: crypto trusts are becoming large supply sinks that lock up cryptoassets and effectively take them out of circulation, reducing the overall liquid supply.

Analytics firm Coin Metrics has a new way to weed out fake data from crypto volume metrics. Only 13 crypto exchanges can be trusted to provide accurate volume figures, according to the firm's new Trusted Volume Framework. The framework more accurately measures trading volumes across crypto markets. Many exchanges, particularly those which list illiquid altcoins, have a reputation of falsifying volumes in a bid to attract traders. https://coinmetrics.io/introducing-coin-metrics-trusted-volume-framework/

I've looked for cross-country comparisons of residents' trust in government, and so far this OECD metric is the best I've found, and the range is quite significant from Switzerland at the very trusting end (84% responding "yes" to the question of confidence in the government) to 31% from Americans, which could explain their tendency to be anti-CBDC.

In North Carolina Dept. of Revenue v. Kimberley Rice Kaestner 1992 Family Trust, the U.S. Supreme Court unanimously said that a state could not tax out-of-state residents on trust income without minimum contacts.

Cryptocurrency custody firm Prime Trust is strengthening its solution to protect digital assets it holds in custody from potential hacks and thefts. Prime Trust has partnered with Fidelity-backed crypto security firm Fireblocks for the initiative.

Less than two months after launching trading for shares of its Bitcoin trust, Canada-based investment manager Ninepoint Partners is planning to change its offering to an exchange-traded fund (ETF) on the Toronto Stock Exchange. https://ninepoint.com/about-ninepoint/press-releases/ninepoint-proposes-conversion-of-bitcoin-trust-into-exchange-traded-fund/