DigiFT, a Singapore-based fintech company, has recently introduced US Treasury bill depository receipt (DR) tokens, allowing investors to own fractional shares of US Treasury bills without needing substantial upfront capital. This new offering aims to make traditional US debt market investments more accessible to a wider range of investors by breaking down financial barriers. With the innovative DR structure, investors can directly own underlying assets and returns in a transparent and investor-friendly manner. DigiFT’s CEO, Henry Zhang, highlighted the company’s commitment to expanding the range of traditional financial assets in the Web3 space through the DR model, offering enhanced investor protection and compliance with regulations.
Compliance with regulations is a key aspect emphasized by DigiFT, as it provides investors with peace of mind and streamlines the investment process. The company ensures that its DR tokens are regulated, making the investment process more accessible and transparent for investors. DigiFT’s US Treasury Tokens (DRUST) is the first offering in a series under the DR structure, directly backed by AA+ rated, highly liquid, and short-term US Treasury Bills. Institutional and accredited investors can access DRUST from their authorized self-custodial wallets using fiat or stablecoins, offering a regulatory-compliant treasury and cash management solution. Established in 2021 and a participant in the Monetary Authority of Singapore’s FinTech Regulatory Sandbox, DigiFT obtained the Capital Markets Services (CMS) license and recognition as a Recognized Market Operator (RMO) in December 2023.
Moody’s, a leading investment risk assessment firm, reported a significant growth in the value of tokenized funds from the beginning of 2023 to approximately $800 million, driven by the tokenization of U.S. treasuries. The inclusion of various assets on public and private blockchains is becoming increasingly popular, with examples such as Franklin Templeton’s U.S. Government Money Fund expanding to Polygon, Backed Finance launching a tokenized short-term U.S. treasury bond ETF, and UBS Asset Management deploying a tokenized money market fund on the Ethereum blockchain. Moody’s also highlighted the potential benefits of tokenized MMFs in combining stability with technological advantages, enhancing market liquidity and accessibility, reducing costs, and improving transparency through automation and smart contracts.
The tokenization of funds continues to gain popularity, with Moody’s recognizing the efficiency of blockchain-based tokenized funds in investing in assets like government bonds and funds. This trend represents untapped market potential and offers a range of benefits, including increased market liquidity, reduced costs, fractional ownership, decreased dependence on intermediaries, shortened settlement times, automation through smart contracts, and enhanced transparency. The growing adoption of blockchain-based tokenized funds is seen as a positive development in the financial markets, offering investors new opportunities and improving the overall efficiency of investing in traditional financial assets. The tokenization of assets like US Treasury bills and government bonds opens up new possibilities for investors looking to diversify their portfolios and access previously inaccessible markets.
