Institutional tokenization continued to gain momentum this week as regulators, financial market infrastructure providers, and global banks advanced new digital asset initiatives across the U.S., the UK, Japan, and Singapore. At the same time, Kaspa developers, led by Michael Sutton, laid important groundwork for the community by introducing ecosystem standards (Kas-Smiths and the KCC repository), formalizing covenant architecture (Actor Models), and releasing a new actor-based programming language (Argent). 

A Popular Sutton Week: Kas-Smiths, Actor Models, and Argent Covenant Language, 

Sutton brought 3 major updates to the Kaspa world. First, Kaspa Core Developer Michael Sutton announced the launch of Kas-Smiths, a new community forum and GitHub repository designed to coordinate ecosystem standards, protocols, tooling, wallets, and applications before fragmented implementations emerge. The accompanying Kaspa Calls for Conventions (KCCs) repository provides a formal process for defining shared conventions across the ecosystem, with early proposals already underway for fungible token standards (KCC-20) and stateful covenant script ABIs (KCC-0001).

According to the Kas-Smiths welcome post: 

"Kas-Smiths is a workshop for Kaspa ecosystem coordination. A place to discuss and forge standards, protocols, tooling, wallets, applications, and the shared infrastructure being built on top of Kaspa. The goal is to create a practical space where ideas can be proposed, challenged, improved, and eventually turned into something the ecosystem can build on."

Unlike Kaspa Improvement Proposals (KIPs), which define changes to the protocol itself, KCCs are intended to establish ecosystem conventions that independent projects can adopt voluntarily to improve interoperability. 

Secondly, Sutton outlined why he believes stateful covenant UTXOs should be understood as "actors," borrowing terminology from the actor model used in concurrent programming.

Explaining the analogy, Sutton wrote:

"The tx is the interaction/msg that triggers the actor’s next state transition."

Rather than treating covenant state as shared mutable data, Sutton argues that each covenant actor exclusively owns and authorizes changes to its own state, with transactions serving as the mechanism that advances the actor through successive state transitions.

He concluded:

"I argue that this is the right mental model and terminology to establish when discussing covenant state-controlling entities: a piece of code owning a state and exclusively authorizing its mutation/consumption."

The proposal provides a conceptual framework for discussing increasingly sophisticated covenant applications as development of Kaspa's execution layer continues.

Lastly, he published Argent, an actor-based language and compiler designed for building covenant applications on Kaspa.

According to the project:

"Argent is an actor-based, multi-contract and multi-app language and compiler for building Kaspa covenant applications"

Argent models covenant UTXOs as actors that own typed state, with transactions defining how those actors transition between states. The compiler translates .ag source files into auditable Silverscript contracts and portable artifacts consumed by argent-runtime, which handles transaction construction and covenant state management.

The documentation notes that Argent is still evolving, with syntax and APIs expected to change while the system matures, and that the project has not yet been audited.

Draft KCC-0001 Specification Defines Covenant Terminology and ABI

Kaspa contributor @IzioDev opened a draft pull request proposing KCC-0001, a specification that defines the core terminology, application binary interface (ABI), and byte layouts for Kaspa covenants.

According to the draft:

"KCC1 is independent of any source language, compiler, framework, or artifact format. It does not change consensus rules."

The proposal defines concepts including covenant programs, covenant instances, continuations, templates, Covenant ID lineage, leader and delegator roles, and virtual elements, providing a common foundation for future covenant tooling and interoperability. The specification remains in draft and is currently under public review.

Explaining the motivation behind the proposal, IzioDev wrote:

"As the first (in order) kcc, kcc-01 brings those assumptions into public discussion while they are easy to question and change."

Moose Expands Companion Essays for Kaspa Book

Community contributor moose.kas (Themooseisloose) announced that his companion essay series explaining the first volume of his Kaspa book has grown to 16 essays, totaling approximately 140 pages.

"Book one is dense, compressed like a zip file, and now I have 13 essays as the 'unzipped' version."

Moose later noted the series has since expanded to 16 essays and that "the building is done, now it just needs refinement."

General Crypto: Regulation and Tradfi Tokenization News

DTCC Validates Tokenized Equity and Treasury Transactions Ahead of October Launch

The Depository Trust & Clearing Corporation (DTCC) announced that tokenized representations of securities held at The Depository Trust Company (DTC) were used to complete live production transactions, including equity and U.S. Treasury/repo delivery-versus-payment (DVP) trades, in what the firm described as "the largest tokenization production initiative in breadth of use cases, asset classes and number of participants."

The milestone comes ahead of the planned October 2026 launch of the DTCC Tokenization Service, which will enable DTC participants to issue tokenized representations of assets held in custody while preserving existing ownership rights and investor protections. More than 30 traditional financial institutions and digital asset firms participated in the initiative, including BlackRock, J.P. Morgan, Goldman Sachs, Vanguard, Nasdaq, the New York Stock Exchange, Circle, Chainlink, Ondo Finance, and State Street.

The production environment demonstrated several real-world workflows, including U.S. Treasury/repo delivery-versus-payment (DVP) trades, equity DVP trades, equity delivery-versus-delivery (DVD) trades, securities lending, collateral pledges, equity token transfers, and central counterparty margin processes across DTCC's private Besu network and the public Canton Network.

DTCC President and CEO Frank La Salla said:

"DTCC demonstrated that we can apply the same institutional rigor to tokenization as we do for traditional assets while continuing to safeguard the integrity and resiliency of the global financial markets."

He added:

"The DTCC Tokenization Service will institutionalize tokenized markets on day one and will be a critical enabler of the digital ecosystem of the future, while reinforcing trust, safety and scale in a digital world."

The announcement follows the December 2025 issuance of a U.S. Securities and Exchange Commission (SEC) No-Action Letter, which authorized DTC to operate a tokenization service for the real-world assets it custodies. DTCC said its Industry Working Group has since grown to more than 100 members and partners as the firm prepares for the service's production launch.

Japan Recategorizes Bitcoin and Crypto Assets Under Financial Instruments Act

Japan's Parliament approved legislation on July 15, 2026, recategorizing Bitcoin and other crypto assets as financial assets under the Financial Instruments and Exchange Act (FIEA). The change moves crypto out of the Payment Services Act, where it had been regulated primarily as a means of payment, and into the same legal framework that governs stocks, bonds, and investment trusts.

The legislation follows the Japanese Cabinet's approval of a draft amendment in April 2026, with the parliamentary vote completing its enactment into law. The new framework is expected to take effect during fiscal 2027.

In addition to the reclassification, lawmakers approved reducing the top tax rate on crypto gains from 55% to a flat 20%, matching the tax treatment of stock gains beginning in 2028.

The legislation also introduces insider trading restrictions for crypto markets, expands regulatory oversight, and requires exchanges to publish information on token issuers, blockchain design, and volatility. Penalties for operating an unregistered crypto business were also increased.

According to Bitcoin Magazine, bringing crypto assets under the FIEA removes a key structural barrier to spot Bitcoin exchange-traded funds (ETFs), potentially creating a regulatory pathway for such products in the future.

UK Launches Wholesale Tokenization Initiative with 54 Financial Institutions

On July 13, 2026, Chris Woolard CBE, HM Treasury's Wholesale Digital Markets Champion, published his inaugural report to Chancellor Rachel Reeves, outlining a roadmap to accelerate tokenization across the UK's wholesale financial markets. The initiative brings together 54 financial institutions and market infrastructure providers in a cross-industry taskforce to help transition tokenized finance from pilot programs to production-scale markets.

The report identifies several priority areas: tokenized collateral, primary issuance (including DIGIT), tokenized funds, digital payment rails, interoperability standards, legal and regulatory certainty, financial crime compliance, tax neutrality, and resilience. Over the next 12 months, the taskforce will initially focus on developing end-to-end tokenized repo use cases through nine industry action groups.

Chris Woolard said:

"As one of the world's largest and most international financial services markets, the UK is uniquely placed to become the global leader in wholesale market tokenization. There is so much potential, technologically and economically, if the right actions are taken and decisions are made now to embrace and support tokenization."

The report also calls for expanding digital issuance initiatives, including the Digital Gilt Instrument (DIGIT) pilot, as well as developing secondary markets and scaling the tokenization of collateral.

The taskforce includes major financial institutions and digital asset firms such as BlackRock, J.P. Morgan, Goldman Sachs, DTCC, HSBC, UBS, Morgan Stanley, Circle, Coinbase, Ripple, Kraken, Ava Labs, and Chainalysis, among others.

Chancellor Rachel Reeves said:

"The UK is already a world leader in global finance and keeping that top spot means harnessing technologies like tokenization. It will make our markets even more competitive, attract investment to the economy, and drive growth across the UK."

According to the report, tokenized real-world assets could represent an 88 trillion USD global market by 2035. It estimates that large-scale adoption could contribute up to £33 billion in annual UK economic output and £14 billion in annual tax revenue by 2035.

Circle Receives Final OCC Approval for National Trust Bank

On July 10, 2026, the U.S. Office of the Comptroller of the Currency (OCC) granted Circle final approval to establish First National Digital Currency Bank, N.A.. This national trust bank will operate under the name Circle National Trust.

The charter places Circle National Trust under direct federal oversight by the OCC and enables federally regulated custody services for USDC. According to Circle, plans include bringing management of the USDC Reserve under the trust bank, subject to regulatory approval and implementation.

Jeremy Allaire, Co-Founder, Chairman, and CEO of Circle, said:

“Federal oversight of our trust bank sets a new standard for transparency, governance, and scale for Circle’s infrastructure and unlocks a new phase of adoption, where leading financial institutions can build on public blockchains with clarity and confidence.”

Circle submitted its application to the OCC on June 30, 2025, received conditional approval in December 2025, and received final approval on July 10, 2026.

UK Updates Tax Treatment for DeFi Lending and Liquidity Pools

On July 13, 2026, HM Revenue & Customs (HMRC) published a policy paper titled "Tax Treatment of Cryptoasset Loans and Liquidity Pools," introducing changes to the UK's Capital Gains Tax treatment of certain decentralized finance (DeFi) activities.

The policy paper states:

“This measure will treat certain disposals involving cryptoasset loans and liquidity pools as being ‘no gain, no loss’ (NGNL), which effectively defers Capital Gains Tax until an economic disposal of the cryptoasset.”

Beginning April 6, 2027, the new framework will apply to single cryptoasset lending arrangements, single cryptoasset borrowing arrangements, and automated market making (AMM) arrangements. Under the rules, qualifying transactions will generally be treated on a no gain, no loss (NGNL) basis, deferring Capital Gains Tax until an economic disposal of the cryptoasset occurs.

According to HMRC, approximately 700,000 individuals who participate in cryptoasset lending and liquidity pool transactions are expected to be affected by the changes.

UK Digital Gilt (DIGIT) Pilot Update 

The UK released a policy paper on July 16, 2026 providing an update on the Digital Gilt Instrument (DIGIT) pilot program, which is scheduled to be issued by Q1 2027. A gilt is a UK government bond. 

The first issuance will occur on HSBC Orion, HSBC’s digital securities depository (DSD), after the platform became the first sandbox entrant to receive approval to provide live DSD services, via Gate 2 approval, on July 13, 2026.

The policy paper also announced that HSBC and the London Stock Exchange Group (LSEG) have signed a memorandum of understanding (MoU):

“…To deliver a bilateral Digital Securities Depository link. This link is intended to provide connectivity between HSBC Orion DSD and LSEG’s DSD and further deliver on the government’s design ambition to support interoperability as a part of the pilot.”

According to the government, the link would allow investors to access and hold DIGIT through either platform, reducing fragmentation between digital infrastructures and supporting broader participation in the pilot.

Additionally, the government expects DIGIT to be listed on the London Stock Exchange's main market and plans to introduce legislative amendments to the Digital Securities Sandbox (DSS) to support digital securities depositories and digital security issuances on authorized DLT platforms.

Progmat Completes Migration to Avalanche

Japan's largest security token platform, Progmat, completed the migration of its digital securities issuance and management platform from Corda 5 to an Avalanche Layer 1, bringing more than ¥452 billion (approximately $2.7 billion) in tokenized assets to an EVM-compatible environment. 

The upgrade introduces a blockchain-agnostic architecture designed to support future multi-chain deployments, while increasing rights transfer processing speeds by approximately 3–5× and reducing transaction finality to under two seconds.

Linux Foundation Launches x402 Foundation

The Linux Foundation announced the operational launch of the x402 Foundation, an open-governance organization established to develop the x402 protocol, an open payment standard for AI agents, APIs, and applications over HTTP. The initiative was first announced in April and has since grown to 40 members spanning traditional finance, payments, cloud infrastructure, and blockchain, including AWS, American Express, Circle, Cloudflare, Coinbase, Google, Mastercard, Ripple, Shopify, Stripe, Visa, and the Solana Foundation.

CEO of the Linux Foundation, Jim Zemlin shared: 

"AI agents and automated systems are becoming active participants in the global economy, yet they have lacked a native, secure way to transact. The operational launch of the x402 Foundation marks a vital milestone in establishing an open, community-governed standard for payments over HTTP."

Originally developed by Coinbase and later contributed to the Linux Foundation, the x402 protocol enables internet-native payments using payment methods ranging from traditional cards to stablecoins.

Vice President of Arc Platform, Circle, Gagan Mac stated: 

"Agents can already call any API over HTTP; x402 gives them a native way to pay for it, standardizing payment as part of the request/response cycle."

Under the Linux Foundation's governance, the x402 Foundation aims to maintain the protocol as an open, vendor-neutral, and interoperable payment standard for machine-to-machine commerce, allowing developers, financial institutions, cloud providers, and other ecosystem participants to collaboratively steward its development.

Cumberland Receives Singapore Major Payment Institution License

Cumberland SG Pte. Ltd., the Singapore subsidiary of institutional crypto trading firm Cumberland, received a Major Payment Institution (MPI) license from the Monetary Authority of Singapore (MAS). The license authorizes the firm to provide regulated Digital Payment Token and Cross-Border Money Transfer services, expanding Cumberland's regulated operations in one of Asia's leading digital asset markets.

Cumberland posted on their X account: 

“Singapore continues to set a high standard for digital asset regulation, and our team is excited to continue building in one of the world's leading financial centres.”