DeFi: UBS launches Ethereum-Based money market fund
Lex Sokolin
Managing Partner @Generative Ventures | ex Consensys Chief Economist & CMO | Fintech, AI, Web3
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DIGITAL ASSETS: UBS Asset Management launches its first tokenized investment fund
UBS Tokenize, the UBS in-house tokenization service, has launched its “USB USD Money Market Investment Fund Token” (“uMINT”) on Ethereum. Access to the fund will originally be restricted to authorized distribution partners, with DigiFT being the first partner. This is fairly common practice for regulated entities, similar to BlackRock’s BUIDL money market fund, which initially partnered with Securitize.?
UBS has been committed to innovation around blockchain-based securities.
To highlight the opportunity size for UBS alone, we note that it manages over $5.7 trillion in assets.?It had acquired Credit Suisse, its historic investment banking competitor, last year. The firm has several large money market fund products, and runs a wealth management, asset management, and capital markets business — each of which could be impacted by a tokenized cash product.
Tokenization in the fund space has been the major blockchain application for banks. Last week, Franklin Templeton expanded its money market fund to the Base L2 . In March 2024, BlackRock launched its first tokenized fund, the BlackRock USD Institutional Digital Liquidity Fund (BUIDL) , on the Ethereum blockchain. This fund allows qualified investors to earn U.S. dollar yields by subscribing through Securitize Markets, LLC. The fund invests 100% of its total assets in cash, U.S. Treasury bills, and repurchase agreements, enabling investors to earn yield while holding the token on the blockchain.?
Other large banks like JPMC have been utilizing blockchain for payments and short-term lending markets. Its Onyx platform processes approximately $1B in daily transactions .?
Tokenization of securities brings greater transparency, fractionalization, 24/7 availability, verifiability, and accessibility. Investment products can benefit from allowing more retail users to participate through fractionalisation via tokens, while also benefiting from transparent tracking of ownership for KYC and user insights.?
Going a step further, we could see governance mechanisms implemented — providing users with greater participation in decision-making, within thresholds, for their investment decisions. This would reflect the type of corporate action participation currently taken on behalf of shareholders by third parties. This could make investment products more participatory and engaging.
McKinsey expects the total tokenized market capitalization to reach $2 trillion by 2030, with $4 trillion as the bullish case. This would be driven by mutual funds, ETFs, alternatives, as well as pure capital market products like fixed income and derivatives. To reach these estimates, market infrastructure providers and financial institutions will have to collaborate and adopt common tools. Otherwise, fragmented networks of limited offerings will lead nowhere. Efforts such as the Monetary Authority of Singapore’s Project Guardian and Regulated Settlement Network are steps in this direction.
Another positive is seeing banks opting for public blockchains like Ethereum (and Solana), instead of private / consortium blockchains. As an example, early enterprise blockchain startup R3 is up for an exit after failing to convert its consortia into product market fit. Choosing a public network, like choosing the public Internet, creates a more sustainable cost-base for financial institutions. They can rely on mutualized security and open-source development, as well as eventually tapping into the distribution of decentralized finance market venues.
It has been slow going, but tokenization continues as a trend at large financial institutions. The happy case in a decade is that blockchains are home to many global financial products, incorporated into the daily lives of more people. But while we like the trend, it is also important to recognize the profound barriers that traditional financial companies have in transforming their businesses and making innovations commercial.
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Podcast Conversation: Distributing €1.4 trillion of investment funds on blockchain, with Allfunds' Ruben Nieto
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Long Take: Why Stripe bought stablecoin start-up Bridge for $1.1B
In this article, we analyze Stripe's acquisition of Bridge, a young company focused on stablecoin payments, for $1.1 billion.
Stripe, previously skeptical of crypto, now sees stablecoins as a superior financial infrastructure compared to legacy systems. Bridge, which moved $5 billion annually at its last raise, was acquired not for its revenue but for its strong team, product maturity, and the massive opportunity in stablecoin-based infrastructure for business banking. Stripe's move aligns with the growing relevance of stablecoins, which processed $7 trillion in volume in 2022, as it targets the untapped potential of integrating stablecoins into the corporate financial world. This acquisition mirrors prior tech successes like Facebook's Instagram buy, and positions Stripe to leverage stablecoins for future growth.
Curated Updates
Here are the rest of the updates hitting our radar.
Financial Institutions and Adoption?
STOKR raises $7.98 million to establish one of first corporate bitcoin treasuries in Europe - The Block
Bolivia continues crypto momentum as bank launches USDT custody - CoinTelegraph
Robinhood Launches Presidential Election Betting Market Allowing Users To Wager On Harris And Trump - Forbes
DeFi and Digital Assets
Blockchain Protocols
? Towns raised $25.5 million from Andreessen Horowitz – The on-chain messaging platform launches today - Fortune
Nillion network raises $25M for decentralized privacy solutions - CoinTelegraph
Ithaca raises $20m in new funding - Fintech Collective
NFTs, DAOs and the Metaverse
Gaming startup Azra Games raises $42M - Blockworks
Praxis gets $525M for utopic crypto, AI-friendly city - CoinTelegraph
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1 周Lex Sokolin The launch of UBS's tokenized money market fund is a fascinating move towards bridging traditional finance with blockchain technology. It’s interesting to see how tokenization is gaining traction, making traditionally conservative investments more accessible through the Ethereum blockchain. Do you think this could be the start of a broader shift in how financial products are structured and offered to investors?
Lex Sokolin, tokenized investments are shaking things up. Real access with a blockchain twist. How do you see this impacting traditional finance?
Co-founder | Pragmatist | Result Oriented | Director of Technical Operations @ Payomatix | Contact for anything related to payments | [email protected]
2 周Tokenized funds open new frontiers for digital assets.