(Kitco News) – Cryptocurrency prices may be struggling to generate momentum after the bull market rally stalled in March, but the underlying blockchain technology that supports them continues to see healthy adoption across businesses and sectors that play major roles in the global economic system.
On Wednesday, Sony Group, in conjunction with Startale Labs, announced the launch of the testnet for Soneium, a public Ethereum layer-2 (L2) blockchain ecosystem designed to “invoke emotion and empower creativity.”
“This dual initiative marks a significant milestone in Sony Group Corporation's entry in Web3, poised to catalyze ecosystem growth and accelerate adoption by leveraging its vast global reach and technological expertise across entertainment, gaming, and consumer electronics sectors,” the company wrote in a press release.
Sony’s blockchain arm, Sony Block Solutions Labs, teamed up with Startale Labs to launch the new L2, which is intended to “connect the blockchain technology (Web3) with the everyday internet services (Web2)” to help “make things easier for users” and encourage more people to start using blockchain.
“Soneium is planned to stand as a versatile, general-purpose blockchain ready to serve diverse needs across all verticals and support users globally,” the release said. “Our aim is to empower developers, creators, and communities with a robust, developer-friendly environment backed by scalable technology. Soneium is built on the principle that blockchain should be accessible, scalable, efficient, and solve genuine problems.”
“We think the development of a comprehensive Web3 solution based on blockchain is very significant to the Sony Group, which has developed a wide variety of businesses under its purpose of ‘Fill the world with emotion, through the power of creativity and technology,’” said Jun Watanabe, Chair of Sony Block Solutions Labs. “We will work to create diverse businesses and new use cases with the aim of delivering customer value that can only be enjoyed through Web3 technology to as many users as possible and making people's lives richer and more colorful.”
Launching the Soneium testnet is the first step in preparing the network for public use. It allows developers and creators to explore how the network will function and build their own applications in anticipation of the mainnet launch.
“After we successfully launch the testnet, we plan to join Optimism’s Superchain to expand our ecosystem,” Sony Group said. “By leveraging Sony Group's vast global distribution network across entertainment, finance, electronics, and gaming, we have an unprecedented opportunity to introduce blockchain technology to global users. Soneium is planned to bridge the gap between Web3 innovation and everyday consumer applications, truly bringing blockchain technology into the mainstream.”
Sony said the network is designed “with mass adoption in mind” and will include “APIs for creating intuitive” and “user-friendly Apps that feel familiar to mainstream users, lowering the barrier to entry for blockchain technology.”
Speculation that BlackRock will launch its own L2
According to a report from on-chain data platform Token Terminal, BlackRock, the world’s largest asset manager, could potentially launch its own L2 blockchain network to host its growing portfolio of blockchain-related products.
Token Terminal noted that BlackRock has divided the cryptocurrency market into three main categories: traditional crypto assets like Bitcoin, stablecoins such as USDC, and tokenized Real World Assets (RWAs), such as those included in its BlackRock USD Institutional Digital Liquidity (BUIDL) Fund.
The report highlighted that BlackRock is the issuer of the iShares Bitcoin Trust (IBIT), the largest spot Bitcoin ETF, has invested in Circle – the issuer of the USDC, the second-ranked stablecoin by market cap – and has invested in Securitize, which oversees the BUIDL on-chain money market fund.
Regarding Bitcoin as an asset, Token Terminal noted that BlackRock “sees three unique advantages to BTC the asset: Internet-native (globally accessible); Cross-border (transactional efficiency); and Capped supply (inflation hedge).”
“BlackRock serves customers across the globe and now, with BTC and IBIT, has a unique product to sell to its clients,” the report said. “It’s likely that BlackRock will productize all major cryptoassets (ETH, SOL, etc.) in a similar manner.”
All that is left for the asset manager to do to complete its crypto journey is launch its own blockchain network, Token Terminal suggested.
“The firm believes that blockchain technology can improve capital markets in several ways: 24/7 operational capital markets; Improved transparency and investor access; and Lower fees and faster settlement,” the report noted.
“We believe that @BlackRock will eventually launch its own blockchain and follow a similar playbook that Coinbase has used with @base,” Token Terminal concluded. “This would allow BlackRock to concentrate the recordkeeping of its holdings across asset classes ($10T AUM) to a single, global, interoperable, and transparent ledger.”
While BlackRock has yet to make any announcements regarding the launch of its own blockchain network, its actions up to this point suggest that may be the most logical step.
The biggest barriers to doing so are the cost of using blockchain and uncertainty regarding crypto regulations.
Creating an L2 that is compatible with Ethereum means the firm would have to pay gas fees to transact on the network. L2s currently play a ‘blob fee,’ which ensures batch transactions are successfully recorded on the Ethereum mainnet, creating an immutable record. BlackRock would also have to deal with the riskiest part of Ethereum-L2 interactions – navigating bridges, which have a history of exploits.
Robert Mitchnick, who serves as Head of Digital Assets at BlackRock and formerly worked as an executive at Ripple, has repeatedly said that regulations are the biggest obstacle to the wider usage of distributed ledger technologies.
This thought was echoed by Boz Menzalji, founding partner at the Four Moons advisory firm, who tweeted, “[A]s much as we would absolutely love to see this, unless regulations and compliance around this are clear, it won't be happening in the short-term at all given the needs for compliance itself. ETFs are one thing, an entire blockchain ecosystem would be incredible, but how would they solve for compliance...?”
After a user suggested that BlackRock could use similar tactics employed by Coinbase to achieve compliance, Menzalji said that was like comparing apples to oranges.
“BlackRock is primarily regulated by various U.S. federal agencies, including the Securities and Exchange Commission (SEC), the Department of Labor (DoL), and the Financial Industry Regulatory Authority (FINRA),” he said. “Coinbase is regulated as a financial institution and must comply with laws such as the Bank Secrecy Act (BSA) and the USA Patriot Act.”
“BlackRock is primarily overseen by: SEC, DoL, FINRA, Federal Reserve, Office of the Comptroller of the Currency (OCC), and European regulatory bodies for its overseas operations,” he added. “Coinbase is primarily overseen by: FinCEN (as an MSB), U.S. Department of the Treasury (OFAC for sanctions compliance), Various state regulatory bodies for money transmission; and the FCA in the UK for electronic money issuance.”
“Significantly more challenging to have a chain and reporting to all entities by BlackRock than Coinbase, but not impossible,” he said. “Coinbase is a case [where] it is possible.”
Another X user responded by saying there is nothing preventing a BlackRock venture company from “Launching a rollup network; Experimenting with new products not currently under reg or for non-U.S. markets; and Experimenting within compliance.”
“Never said [BlackRock] will be prevented from launching,” Menzalji replied. “Said it would be really challenging given the lack of clear regulatory guidance. It’s what can they launch today that could be cross-sold to their existing offerings for additional yield and/or be a new revenue channel for them that startups/protocols can benefit from their support. I think it’s more about providing support and creating their own app ecosystem.”
