WisdomTree has introduced a tokenized platform for real-world assets (RWA) that aims to allow users to access the asset manager’s regulated fund tokens from any wallet or blockchain network, the company announced on September 18th.
The platform, called WisdomTree Connect, will initially store users’ tokenized investment funds with third-party custodians while sending a “digital record” of ownership to the user’s personal wallet, WisdomTree explained. Eventually, WisdomTree plans to expand access to its RWAs to other customer-facing platforms and apps, as well as to retail users with self-hosted wallets.
WisdomTree currently has over a dozen tokenized funds, and RWAs, such as tokenized claims on financial assets, commodities, or art, are valued at over $12 billion in total locked value, according to RWA.xyz. This represents a $30 trillion market opportunity globally, as stated by Colin Butler, Polygon’s global head of institutional capital, in an interview with Cointelegraph in August.
The United States Securities and Exchange Commission (SEC) mandates that tokenized investment funds be held by a qualified third-party custodian, which has hindered adoption among crypto-native users who usually prefer to self-custody tokens in user-managed wallets. Franklin Templeton’s head of digital assets, Roger Bayston, expressed a vision of a world where users can manage their own wallets independently of the wallet environment during an interview with Cointelegraph in August. He also mentioned working closely with the SEC on this capability.
WisdomTree manages more than a dozen tokenized investment funds, with holdings that include money market instruments, S&P 500 stocks, and US treasury bonds of various durations. The most popular tokenized RWAs are those that represent claims on off-chain money market funds, which offer low-risk yield on US Dollars. The BlackRock USD Institutional Digital Liquidity Fund (BUIDL) and Franklin OnChain U.S. Government Money Fund (FOBXX) are the largest in terms of assets under management (AUM), with approximately $520 million and $430 million, respectively. On the other hand, WisdomTree’s tokenized money fund, Government Money Market Digital (WTGXX), lags behind with less than $8 million in AUM as of September 18th.
WisdomTree stated that by integrating with more blockchain networks and expanding RWA access to user-managed wallets, WisdomTree Connect addresses a key problem for businesses seeking integration between traditional and decentralized finance.