Traditional Financial Firms Eye Public Blockchains for Asset Tokenization: Former Grayscale Exec
Summary:
Former Grayscale executive, Celisa Morin, reveals a growing inclination among traditional financial institutions towards tokenizing assets on public blockchains. This trend, led by BlackRock with its tokenized 'BUIDL' fund on Ethereum, is seen as a likely path for other traditional firms. Despite potential legal issues, public blockchains have advantages over private networks. Morin cited Franklin Templeton’s move to launch its tokenized fund on Ethereum's layer-2 network, Polygon, as another example. However, she expressed less optimism for the approval of spot Ether exchange-traded funds (ETFs) by May 23rd.
A former executive from Grayscale has stated that there's growing interest among traditional financial firms towards tokenizing assets on public blockchains. Celisa Morin, who used to be the Vice President of Platform Distribution at Grayscale until the middle of 2023, says that this new trend, led by BlackRock, might urge more firms to favour public over private blockchains.
Morin observes increased interest in private chains, evidenced by JPMorgan's Onyx, however, she believes the present narrative is strongly in favour of public blockchains. Currently leading the crypto unit at the international law firm Reed Smith, Morin suggests it's logical for larger traditional financial firms to emulate BlackRock's lead. The latter initiated its $100 million tokenized 'BUIDL' fund on the Ethereum network on March 18, which now commands $288 million in assets, as recorded by Dune Analytics.
The decision by BlackRock to introduce a fund on Ethereum received its share of backlash, and it also had the asset manager's on-chain wallet targeted for various spoofs from the crypto-community. Deposits to BlackRock's wallet included questionable transactions from the now OFAC-sanctioned mixer Tornado Cash, as well as a range of cryptocurrencies from real-world asset (RWA) tokenization projects and memecoins. However, despite the potential legal pitfalls of tokenizing assets on public blockchains, Morin believes many firms may follow BlackRock's example.
Morin highlighted that Franklin Templeton has already pioneered this approach by launching its tokenized money market fund on Ethereum's layer-2 network, Polygon, in October of last year. The Franklin OnChain U.S. Government Money Fund (FOBXX), launched by Franklin Templeton almost a year ago, now houses a total of $360.2 million in U.S. Treasurys. Cumulative data reveals that $1.08 billion in U.S. Treasurys has now been tokenized across 17 products.
Regarding spot Ether (ETH) exchange-traded funds (ETFs), Morin was not so optimistic, stating an approval in May was highly unlikely. Echoing Eric Balchunas, Senior Bloomberg ETF analyst, Morin implied that the VanEck's deadline on May 23rd is looking very unlikely given the lack of outreach from the United States Securities and Exchange Commission to potential fund issuers.
Published At
4/15/2024 2:18:00 AM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.