Employment, Productivity, Immigration: Effects of the H-1B Visa Fee Hike

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Oxford Economics has reduced its forecast for net migration to the United States (legal immigration minus unauthorized emigration) in response to a slowdown in legal migration and the expected effects of the H-1B visa fee increase. Less immigration implies slower labor force growth and, therefore, a tighter labor market, which in turn would moderate the rise in the unemployment rate in the coming years.

The report “New visa fees cloud the immigration outlook” by Oxford Economics, prepared by Michael Pearce, examines the consequences of the new U.S. immigration policy. The study indicates that the arrival of legal immigrants could average around 775,000 people per year, representing an annual reduction of about 140,000 individuals compared with the organization’s previous estimates. Adding unauthorized departures, the adjusted total net migration could be around 400,000 people per year—well below the recent pace of 1.1 to 1.2 million annually.

These revisions imply that, in the medium to long term, the U.S. population could be about 566,000 people below previous projections, and the labor force could shrink by around 350,000 people relative to September estimates.

The Oxford Economics research notes that, with such limited labor force growth, future economic performance will be increasingly conditioned by the level of productivity the U.S. economy is able to maintain. In other words, with little demographic momentum, the key will be how much each additional worker can produce.

The change in the H-1B fee


One of the most significant changes analyzed in the study is the introduction of a one-time fee of $100,000 for initial H-1B visa applications. This fee, which must be paid by the employer, is an order of magnitude higher than the fees previously in effect. Those who already hold H-1B visas are not required to pay it.

The H-1B program initially grants up to 65,000 visas per year, plus 20,000 additional ones for U.S. master’s degree graduates. Since demand for these visas typically far exceeds supply (for example, there were more than 340,000 valid applications for fiscal year 2025), they are usually allocated by lottery.

The study points out that the $100,000 fee is especially burdensome for entry- or mid-level positions (except in very high-paying fields such as medicine or law), which could suppress demand for new professionals under this category. In addition, the government proposes modifying the lottery system to favor workers with higher wage levels, which would tend to encourage mid- and high-level hiring at the expense of entry-level positions.

These changes could reduce the number of new H-1B petitions below the permitted cap, leading to a net contraction in this type of visa. It is particularly relevant that nearly 70% of current beneficiaries work in computing or technology fields, suggesting a direct impact on that sector.

The study also notes that around half of H-1B visas are granted to individuals already in the U.S., many of them transitioning from student visas. In turn, many beneficiaries can support their spouses with associated work permits. Therefore, if the appeal for foreign students declines, this could create a ripple effect on the H-1B program and on legal migration overall.

The inflow of foreign students slows


The report warns that a slowdown in the inflow of foreign students is already being observed. Their numbers have been growing at a much slower pace during the year studied, and some student permits show a reduction of around 7% compared with the previous year. Part of this is due to the U.S. administration having temporarily suspended the issuance of student visas at one point, later resuming processing under stricter rules (for example, requiring disclosure of social media accounts).

This trend is concerning, the report says, because students on visas often have the opportunity to work temporarily after graduation (for example, through the Optional Practical Training, or OPT, program, with additional extensions for STEM fields). A sustained decline in student numbers would affect legal migration and, consequently, the entry of new workers into the labor market.

Nevertheless, the analysis acknowledges that there is uncertainty about the magnitude of the actual impact, since the administration has not published monthly visa issuance data since July (as of the report’s date), and some indicators—such as work authorization permits—already show a trend toward deceleration.

LAKPA Obtains Authorization to Operate as an RIA in the U.S.

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The fintech LAKPA announced the authorization of its Registered Investment Advisor (RIA) in the United States by the Securities and Exchange Commission (SEC). This will allow them to expand their reach, according to a statement.

The technology firm specialized in financial advisory for high-net-worth investors – linked to the Chilean group LarrainVial – highlighted that this decision marks progress in its expansion plans, with the ambition of becoming the largest community of financial advisors in Latin America.

With the green light from the SEC, LAKPA’s RIA will enable them to directly manage the offshore assets of clients in the region, especially in markets such as Mexico, where international diversification is a key component of wealth management.

Until now, explained the fintech, these assets had been managed through indirect agreements with other financial institutions. In this way, they expect to provide greater efficiency, security, and transparency, they highlighted.

Currently, the fintech has more than 50 strategic alliances with local and global brokerage firms and asset managers. The RIA’s approval opens the door to expand these agreements to U.S. broker-dealers and custodians, strengthening the open architecture of its platform and multiplying the investment options available.

“This step not only expands our capabilities, but also reaffirms our commitment to ethics, transparency, and the building of a solid and reliable financial ecosystem in Hispanic America,” stated Alicia Arias, commercial director at LAKPA México, in the press release.

Trump Doesn’t Stop the Investment Boom in Mexico

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Despite the financial volatility unleashed by the arrival of President Donald Trump in the United States, as well as uncertainty stemming from factors such as the eventual review of the USMCA and the implementation of a controversial reform in the country’s judicial branch, if 2025 had ended in September, it would have marked a historic period for investment returns in Mexico’s financial market.

The numbers leave no room for doubt. Domestic market stocks are already yielding a rate slightly above 30% annually, their best period since 2003. Fibras are delivering a cumulative return of 31%, marking the best year since 2011. The Mexican peso has appreciated by 13%, the best performance in 50 years as of a September close. And Cetes, the leading government securities in the domestic market, maintain an average real rate close to 5%, ranking among the best periods in the past 20 years.

Looking at long-term government debt yields, the trend is the same: the M bond, the most influential instrument in this segment of the domestic market, is showing a return of 15.6% so far this year. Udibonos, in turn, are yielding 16.3%. In both cases, yields of this magnitude haven’t been seen since at least 2010, and on a cumulative basis, it’s the best historical return as of September.

“This 2025 is shaping up to be an exceptional year and a reminder that peso-denominated assets have been by far a better alternative than the dollar,” says Franklin Templeton in a report titled “Couldn’t Be Better! The Best Year for Mexican Assets.”

For its part, Banco Base considers that strong returns in the Mexican market are precisely linked to volatility, since the country remains a partner of the world’s largest economy, and factors such as the trade war and general global financial uncertainty are causing capital to shift toward the closest emerging market to that power—one that offers attractive yields and enjoys relative financial and political stability. That country, without a doubt, is Mexico.

Banamex also highlights this year as one of great returns for Mexican assets, unless something extraordinary occurs in the next two months. Stability and certainty—despite being a low-growth economy—are the main draws for both domestic and global investors, says the bank (recently sold in a majority stake to a local businessman who acquired 25% of the firm).

How far will the Mexican market go? That’s the question among analysts and traders, as they speculate on what might happen over the next two years when the country must face two challenges that will test the resilience of its economy. The first factor is the upcoming review of the USMCA with the United States and Canada. On that point, even though significant tension and potential disagreements are expected—especially with the U.S. negotiating team—everyone is betting that the free trade agreement will prevail, though it will be a period of volatility and uncertainty.

The second medium-term factor is the crucial midterm legislative elections in 2027, during which the recall referendum mechanism provided by the constitution could also be brought to the table—in this case for current president Claudia Sheinbaum. The president currently enjoys solid public approval, but it is unknown whether—even as a strategy—she herself might promote this process. What is certain is that the election to renew the lower house (Chamber of Deputies), along with nearly 20 gubernatorial races, will be a moment of uncertainty for the country’s economy.

However, at the end of last year, most analyses warned of potential risks for Mexico with the return of President Trump to the United States—some even predicting an imminent recession in Latin America’s second-largest economy. Reality has proven otherwise and confirms that expectations are not always fulfilled.

Masterclass on CLOs: Everything You Need to Know Before Investing in This Asset

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CLOs Have Become the Third Most Liquid Fixed Income Market in the U.S., Behind Only Treasuries and Agency MBS. This was stated by John Kerschner, Global Head of Securitized Products and Portfolio Manager at Janus Henderson, during the Madrid Investment Summit held by the firm in September.

However, Kerschner acknowledged that this asset still offers a certain complexity premium, as not all investors are equally informed about how it works. The firm has been making ongoing efforts to educate its clients—even if that means this premium disappears—because they believe the investment opportunity in CLOs is more alive than ever. Thus, Kerschner—who manages the world’s largest actively managed CLO ETF (JAAA)—used his appearance at the event to give a class on the structuring, functioning, and characteristics of these investment instruments.

Demystifying Asset Securitization


His presentation began by addressing the very concept of securitization, with the manager noting that “it’s a big word that for some is complicated and, for others, even scary—but it doesn’t have to be.”

“Securitization is, and always has been, about gathering a pool of loans, bundling them, establishing a framework for them, and then taking the cash flow from those loans and splitting it into different levels of risk and return. That’s it. Nothing more, nothing less,” he explained simply. This applies to an auto loan, a mortgage, real estate credit, or a corporate loan—though the process has evolved over time.

Kerschner recalled that the loan market was born in the 1980s as a solution for companies that were too small or illiquid to access financing through high-yield debt. Initially, these companies turned to banks for loans, although under very strict conditions. Later, Wall Street saw an opportunity in this market, and several players started what we now know as the leveraged loan market. “The problem is that leveraged loans are fairly risky, even today, with an average rating of B,” the manager pointed out.

Continuing his explanation, Kerschner noted that “even with all the institutional investors available, the leveraged loan market began to run out of investors.” At that point, the idea emerged to use securitization technology—already present in ABS, mortgages, or real estate markets—and apply it to corporate loans. “That’s the magic of CLOs: you take something that’s relatively risky, somewhat liquid and volatile, and create other assets that are much safer, more liquid, less volatile, and with better ratings,” he summarized.

Key Facts About CLOs


The expert shared several important data points to better understand the size and behavior of this asset class. For starters, he estimates that auto ABS represent a $200 billion market and have not experienced any defaults since the late 1980s—“not even in the AAA segment.” He clarified that while some loans did default, “the securitization was structured to handle it,” which is why CLOs have not seen a single default in 40 years. Furthermore, Kerschner added, “since the Global Financial Crisis (GFC), no investment-grade CLO has ever defaulted.” “The safety works, and securitization works most of the time—especially in CLOs,” he concluded.

He pointed out that U.S. GDP amounts to $30 trillion and the EU’s to $20 trillion, while the U.S. securitization market is valued at $5 trillion—that is, about 17% of GDP “excluding agency mortgages.” In Europe, securitizations amount to just $660 billion. In short, the U.S. market is five times larger than the European one, and according to Kerschner, this distinction matters because “loans that are not securitized sit on the balance sheets of European banks; that’s why European banks are not as dynamic as U.S. banks.”

Overall, based on the expert’s data, the global CLO market is valued at $1.7 trillion, while the European market stands at about $400 billion. “Obviously, it’s not as large as the U.S. market, but proportionally it’s fairly close,” he concluded.

What Makes CLOs Special?


The remainder of Kerschner’s masterclass focused on the four main characteristics attributed to CLOs: return, safety, liquidity, and diversification.

On the first point, the expert noted that an asset combining higher yield with lower volatility clearly points to a better Sharpe ratio; CLO returns exceed those of corporate credit, with lower volatility. While acknowledging that CLO yields are floating, “even if you hedged that component, they would still show lower volatility,” he explained.

Regarding safety, Kerschner stressed that no AAA CLO has defaulted since the GFC, thanks to tightened rating agency criteria.

On liquidity, the portfolio manager highlighted the firm’s experience trading CLOs during the extreme market conditions of March 2020 at the onset of the pandemic. “This experience—especially with AAA CLOs—gave us the confidence to launch JAAA in October 2020.” Today, this ETF can trade “hundreds of millions in market value in a single day, with a one-cent bid-ask spread,” and has reached a record volume of $1.2 billion in a single session. During the significant volatility seen on April’s Liberation Day, the ETF dropped between 1% and 2%, leading the manager to note that this vehicle “has more volatility than cash, but only during dislocations.” “CLOs are much more liquid than people think,” the expert concluded.

Finally, on diversification, Kerschner stated that “CLOs are quite similar to corporate credit but offer much better diversification than leveraged loans and high yield.” He believes this is especially relevant for investors in fixed income products based on Aggregate-type indexes, where CLOs are not represented due to their floating-rate nature. “Many people are underexposed to this asset class simply because it’s not in the indexes,” the manager concluded.

MSCI Presents Global Classification Standards for Private Assets

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It is no surprise that private assets are growing rapidly, driven by institutional allocations and increasing flows from private wealth. However, the industry continues to be constrained by a lack of transparency, with no common system to classify exposures, measure performance, or effectively communicate strategies. Against this backdrop, MSCI launched MSCI PACS, a proprietary asset classification framework designed to bring order, comparability, and consistency to private markets.

By covering a wide range of private assets, including private companies, real estate, and infrastructure, PACS provides detailed classifications that can be used to compare, analyze, and communicate portfolio strategies and performance effectively throughout the investment lifecycle, according to the firm in a statement.

“Private markets are at an inflection point, with growing relevance in the global financial ecosystem,” said Luke Flemmer, Head of Private Assets at MSCI. “With PACS, MSCI introduces the infrastructure that will define how private assets are identified, compared, and analyzed globally in the years to come.”

MSCI PACS is a global taxonomy created specifically for private assets. It builds on decades of MSCI’s leadership in providing standards and tools, including the Global Industry Classification Standard (GICS®), which is used to categorize and compare publicly traded companies around the world.

PACS, offered as an AI-powered managed data service, applies consistent sector tagging at scale, providing a strong foundation of transparency and comparability to the private markets industry.

The launch of PACS reflects MSCI’s broad commitment to equipping private markets professionals with the tools, research, and data needed to improve transparency and support informed decision-making across their portfolios.

Data Points Every Fund Investor Should Monitor

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Fund return, or fund return versus a benchmark, is usually the most common factor investors use when assessing a fund’s performance. However, more sophisticated investors will utilize a set of metrics that reveal what’s happening beneath the surface of fund performance.

Active Share: Measuring Active Management

The Active Share ratio measures the percentage of a fund’s portfolio that differs from its benchmark index. A fund with a low active share is very close to an index tracker fund or ETF, and investors could easily replicate a large proportion of the fund using one of these vehicles at a much lower cost. Active share reveals whether a manager is actually implementing their stated strategy or simply hugging the benchmark.

FirstRate Data, a financial data provider, notes that funds with active equity strategies typically have 70-90% active share ratios. Funds claiming active management but with an active share below 60% are usually charging active fees for benchmark-like performance. Conversely, an extremely high active share (above 95%) may indicate an excessive concentration risk.

Tracking Error Volatility: Understand A Fund’s Risk Profile

Tracking error is the standard deviation of a fund’s performance relative to the performance of its benchmark index. Unlike active share, which shows the fund’s return difference, the tracking error shows the deviation in terms of volatility. Volatility is a common proxy for portfolio risk, so other things being equal, a fund with a lower volatility is preferable.

Active equity funds typically operate with a tracking error between 4-8%. Lower levels are often indicative of closet index tracking, whereas higher levels can signal excessive risk-taking.

Volatility is often combined with the fund’s return to calculate the Sharpe ratio, which is the units of return per unit of volatility. So a fund returning 20% with a 15% volatility would have a Sharpe ratio of 1.33 (20/15). This would make the fund’s risk-adjusted returns superior to a fund with 22% return and an 18% volatility, which would have a Sharpe ratio of 1.22. Quantquote notes that the best of class funds have a Sharpe ratio higher than 2, with a Sharpe below 1 usually being a signal of poor fund performance.

Asset Flow Momentum: Reading the Market Signals

The asset flow is the direction, magnitude, and consistency of capital flows into or out of a fund. Asset flows represent the collective judgment of the investment marketplace. In general, a slow and persistent flow in or out of a fund may represent the popularity of the fund’s strategy; for example, value-focused funds as a group experienced a consistent outflow since 2010. However, a sudden or dramatic acceleration in outflows may signal an imminent issue with the fund. Conversely, a sudden inflow of capital can be a predictor of a decline in returns as the fund may struggle to scale up the size of its investments.

Expense Ratio Efficiency: Value Beyond the Headline Number

Whilst expense ratios are widely reported, the absolute expense ratio matters less than whether those expenses translate into value creation. A 1.5% expense ratio might be reasonable for a specialized emerging markets strategy, strong performance and a low correlation with the broader market, while a 1.0% ratio could be excessive for a large-cap growth fund that clings tightly to the benchmark index.

Fees are a persistent drag on long-term performance and compound over time. However, blindly choosing the cheapest option often leads to suboptimal outcomes. The key is understanding whether higher fees fund genuine value-added activities like superior research, risk management, or access to unique opportunities.

It is important to consider the total cost of fund ownership, which includes transaction costs as well as tax efficiency, and not just the headline expense ratio. Funds should have stable expense ratios over time, which should usually decline as asset-under-management has grown and the fund manager is able to pass some of the scale benefits to investors.

Style Drift: Staying True to The Investment Strategy

Style drift occurs when a fund moves away from its stated investment mandate, usually in response to being in an unpopular investment category. For example, a value fund may gradually move towards a growth-focused investment thesis to boost returns and attract more capital. Typically, the fund will signal this by reframing its investment thesis by redefining some of the core definitions of its target investments, so what constitutes a value stock or a large cap may change.

Style drift can undermine portfolio construction and risk management, as an investor will often have several fund strategies in a single portfolio. When funds change their characteristics without notice, investors may unknowingly take on unintended exposures or increase their concentration risk as more funds crowd into popular investment themes.

To protect against this, it is important to monitor the key style characteristics over time, such as the average market capitalization, sector weightings, fundamental ratios (P/E, P/B, ROE), and geographic exposure for each fund. In addition, tracking these factors in aggregate at the fund level can provide some insights into overall portfolio concentrations and a gradual drift in the component fund’s strategies.

 

Written by Ryan Maxwell, director of research at FirstRate Data.

Humanoid Robotics Attracts the ETF Industry

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Humanoid robots are machines designed to mimic the human body and perform human tasks, combining sensors, artificial intelligence, and dexterity to operate in real-world environments such as manufacturing, logistics, healthcare, and consumer services.

In this industry, the main players are mostly Chinese companies like UBTech Robotics. However, Western firms such as Tesla are also developing humanoid robot models. The potential is vast: Goldman Sachs projects that the global humanoid market could reach $38 billion by 2035, while Morgan Stanley forecasts up to 1 billion robots by 2050, expected to generate around $5 trillion in revenue.

ETFs Are Emerging to Capitalize on This Investment Megatrend

KraneShares is preparing to launch the first humanoid robotics-focused ETF in the European market: the KraneShares Global Humanoid and Embodied Intelligence Index UCITS ETF (KOID) has been approved by the Central Bank of Ireland (CBI) for listing on the London Stock Exchange.

This is the latest in a wave of ETF launches this year. KraneShares had already introduced the first version of this ETF on the Cboe U.S. exchange. Shares of the fund—which has global exposure to companies primarily based in the United States, China, and Japan, and seeks to replicate the MerQube Global Humanoid and Embodied Intelligence Index—have risen 28% from its June launch through the end of September.

Following this launch came ETFs from Roundhill and Themes ETF, a firm affiliated with Leverage Shares. Roundhill acknowledges on its website that humanoid robotics “represents one of the most transformative frontiers in artificial intelligence and automation.” To capitalize on this potential, it launched the Roundhill Humanoid Robotics ETF (HUMN) at the end of June, an actively managed fund listed on the Cboe. As of September 30, its shares had appreciated 20%.

Themes ETF, meanwhile, introduced the Themes Humanoid Robotics ETF (BOTT) in August. This is a passively managed product that aims to track the Solactive Global Humanoid Robotics Index and is listed on the Nasdaq.

Outlook for Latin America: Electoral Processes, the Dollar, Trade Tensions, and Inflation

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According to the latest report by Solunion, a credit insurance company offering services related to commercial risk management, the region is experiencing a combination of consumption dependence, low investment, and the challenge of balancing external competitiveness with internal purchasing power, all within a context of persistent inflation, political tensions, and increased exposure to trade and security risks.

Among its findings, the report notes that Latin America’s growth in recent years has been driven by the boom in commodities, increased agricultural volumes, and strong domestic consumption—factors that led to upward revisions in economic forecasts between 2022 and 2024. However, this expansion period appears to be giving way in 2025 to a phase of stalled growth.

Key Findings


“Systemic uncertainty—stemming from trade tensions, geopolitical conflicts, and financial volatility—is combining with the appreciation of regional currencies against the dollar. This movement, while improving internal purchasing power, reduces export competitiveness and encourages an increase in imports, displacing local production,” notes Luca Moneta, Senior Economist for Emerging Markets & Country Risk at Allianz Trade, one of Solunion‘s shareholders.

According to the report, in some cases, this effect has been amplified by the acceleration of trade operations to avoid tariffs, adding volatility to trade flows. For 2025, stagnant growth is expected in many economies, as well as additional risks in 2026 for key markets like Mexico and Brazil, where factors such as slowing consumption, declining remittances, and falling commodity prices could negatively impact economic activity.

“This is a scenario in which Argentina gains prominence and partially offsets the lower contribution of these two economies to regional growth,” the report adds.

According to the report, inflation remains one of the region’s main challenges, with persistent pressures in several markets despite restrictive monetary policies. In various countries, benchmark interest rates appear to have reached their peak and, based on central bank communications, could begin to decline. The average real interest rate in the region remains approximately two percentage points above that of the United States, which has contributed to the strength of local currencies.

“If interest rates were to fall prematurely and the Fed did not resume an expansionary cycle, local currencies could weaken and inflation could rise. In more dollarized economies such as Mexico and Chile, the additional boost to growth would be almost entirely offset by this price effect,” the report explains.

A Tightly Packed Electoral Calendar

A key point in the report is that the 2025–2026 electoral cycle in Latin America is unfolding in a context of growing polarization and a lack of clear majorities—a widespread phenomenon that adds uncertainty to the economic outlook.

“Insecurity is another factor impacting investment, especially in consumer-oriented sectors. Added to this is a rise in international litigation, including cases initiated between countries and investors within the region itself, with particular impact on strategic sectors such as mining and energy resources,” it states.

How Do These Factors Impact Each Economy?

From a country-by-country perspective, the report highlights that Mexico has weathered U.S. protectionism better than expected; however, consumer confidence declined following the U.S. elections. The strength of the peso has enabled some degree of monetary easing, although the upcoming 2026 review of the USMCA (T-MEC) represents a significant challenge for trade relations and investor sentiment.

In the case of Brazil, the country is experiencing modest but steady growth, driven by resilient domestic consumption and higher-than-anticipated public spending. Nonetheless, the economy faces headwinds in the form of a credit slowdown and persistent investment difficulties, which could limit the sustainability of its current growth trajectory.

For its part, Argentina is beginning to emerge from recession thanks to economic stabilization measures, although inflation is expected to remain high (24% by the end of 2025).

In Chile, consumption is rebounding due to the revaluation of copper and macroeconomic stability, but investment is constrained by the volatility of the peso.

Colombia maintains growth driven by consumption (77% of GDP), but suffers from low fixed investment, elevated fiscal risk, and political uncertainty.

Lastly, Peru maintains macroeconomic stability, with inflation below 2% and low unemployment, although domestic consumption remains weak and mining output is declining.

Ecuador, meanwhile, is showing signs of recovery, with cocoa emerging as a new key sector in primary production.

Toward More Balanced Growth

The report’s main conclusion is that growth in the region is ongoing, but overly reliant on consumption and lacking sufficient investment—with the exception of countries like Peru.

“The main challenges are high interest rates, external factors limiting room for maneuver, and a politically and socially uncertain environment. The key to sustaining the recovery will be to diversify production and improve investment conditions, thereby reducing exposure to internal and external risks that could hinder momentum,” the report argues.

Five Countries That Are Redefining the Digital Asset Landscape

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As Cryptocurrency Markets Rebound in 2025—Driven by Price Surges and the Growth of Financial Products Like Spot Bitcoin ETFs in the United States—the True Transformation Is Taking Place in a Less Visible Arena: The Geopolitical One. According to WisdomTree, Beyond Charts and Headlines, a Global Race for Digital Asset Dominance Is Taking Shape.

“Nigeria, the United States, the United Arab Emirates, Brazil, and South Korea are positioning themselves as strategic hubs for the future of cryptocurrencies. They’re not just adopting these assets—they’re operationalizing them,” says Dovile Silenskyte, Director of Digital Asset Research at WisdomTree. According to the expert, Nigeria has become “ground zero” for cryptocurrencies as a financial lifeline.

“In Lagos, Nigeria’s economic capital, cryptocurrency use is not a speculative trend but a vital financial tool. Nigeria tops global adoption rankings, driven by a combination of a digitally active youth, persistent inflation, and ineffective banking systems. Peer-to-peer use of stablecoins (especially USDT on Tron) is booming. Moreover, despite past hostility from the Central Bank, users have developed parallel pathways. The central bank’s digital currency (CBDC) pilot project, the eNaira, has failed—reaffirming the strong popular preference for decentralized alternatives,” comments Silenskyte.

U.S. and United Arab Emirates: Regulation and Testing

In the case of the United States, it remains the epicenter of global crypto financing, with unmatched institutional strength. “U.S. regulation continues to be a complex landscape, but institutional capital has begun to shape the ecosystem. The 2024 approval of spot bitcoin ETFs triggered an inflow of more than $40 billion in assets under management,” she recalls.

In this regard, major asset managers are building integrated crypto infrastructures: from tokenized treasuries to stablecoin-based solutions. “Another noteworthy development is that the state of New Hampshire made history by allowing public investments in large-cap cryptocurrencies,” the expert adds.

As for the United Arab Emirates, she notes that they have established themselves as a global-scale regulatory laboratory for digital assets. She believes Dubai is not waiting for the West to lead the way. With the Virtual Assets Regulatory Authority (VARA) at the helm, the UAE has established a clear and business-friendly licensing regime, attracting major platforms like Binance, OKX, and Bybit.

Additionally, blockchain technology is being integrated into trade finance and the real estate sector through national digital economy initiatives.

Brazil and South Korea: Two Regional Leaders

“The case of Brazil shows that the combination of technological innovation and progressive regulation leads to real adoption. The country is moving beyond being just a Latin American benchmark to becoming a central node in the regional crypto economy. PIX, the central bank’s instant payment system, integrates seamlessly with stablecoin flows; exchanges such as Mercado Bitcoin are scaling under a clear regime with tax incentives; and the digital Brazilian real (DREX) and tokenized public debt instruments are under development,” she explains.

Finally, she highlights that the South Korean crypto scene combines one of the world’s strongest retail appetites with strict regulatory oversight. It represents a mature, liquid, and increasingly regulated ecosystem that is key to the crypto map of Asia. “Local exchanges report volumes comparable to the stock market. Additionally, authorities enforce strict rules on verified identity trading, taxation, and licensing, and the country is also advancing regulatory frameworks for security tokens and DeFi,” she concludes.

Principal Partners With Barings to Strengthen Its Private Credit Platform

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Principal Financial Group has announced a strategic partnership with Barings to expand Principal’s portfolio through an allocation of up to $1 billion in high-quality customized private investments. According to the statement, the investments will be made through a separately managed account and a co-investment structure. The co-investment structure will be managed by Principal AM, Principal’s dedicated in-house asset manager, which oversees approximately 95% of Principal’s general account portfolio.

“This announcement is part of our broader approach to private markets at Principal: building selective partnerships that complement our internal expertise in credit analysis and portfolio management, within differentiated structures and assets,” said Kamal Bhatia, President and CEO of Principal Asset Management.

The partnership will focus on high-quality customized private investments, with Barings serving as the originating manager of the assets. This strengthens Principal’s commitment to enhancing the company’s general account through diversified and scalable private credit strategies, offering strong risk-adjusted returns aligned with its liabilities. Partnering with Barings Portfolio Finance, a specialized direct originator with deep experience and capability, and combining it with the strong credit analysis and portfolio management expertise of Principal Asset Management, creates a beneficial structure for the company.

“We continue to look for ways to evolve and diversify our private credit portfolio in ways that add value. This partnership deepens our presence in the private markets ecosystem, aligning our strong insurance entity and internal asset management platform with the strengths of an experienced external manager,” added Ken McCullum, Executive Vice President and Chief Risk Officer of Principal Financial Group.

For his part, Dadong Yan, Head of Barings Portfolio Finance, commented: “We are excited to partner with Principal and bring the direct investment origination platform of Barings Portfolio Finance to benefit Principal’s policyholders and shareholders. In a shifting market environment, Barings Portfolio Finance is uniquely positioned to understand the evolving needs of insurers.”

The partnership with Barings allows Principal to access a differentiated segment of the private credit market, complementing the internal capabilities of Principal Asset Management in real estate, direct middle-market lending, private corporate credit, and infrastructure credit.