Financial institutions on Wall Street are increasingly focused on industrializing proofs-of-concept (PoCs) developed within the blockchain experiment known as Project Guardian. JPMorgan’s blockchain platform, Onyx, is looking to convert insights gained from its pilot program with the Monetary Authority of Singapore (MAS) into tangible products. During the TokenizeThis event in Miami, Stephanie Lok, product manager of JPMorgan’s Onyx, emphasized investment fund tokenization as a key area of focus. WisdomTree, another traditional firm heavily invested in blockchain-enabled finance migration, is exploring real-world asset tokenization for investor portfolios, aiming to provide various on-chain services through a unified interface for clients.
WisdomTree, an asset manager, has highlighted its interest in portfolio personalization and blending portfolios with checking accounts. The company sees potential benefits in real-world asset tokenization for investor portfolios, allowing for myriad allocation variations and risk profiles. WisdomTree aims to integrate various financial services, including tokenized portfolios and traditional banking services, into a single application, enhancing clients’ ability to use their money more effectively. As a prominent asset manager involved in Bitcoin exchange-traded funds (ETFs), WisdomTree brings its expertise and experience to the Project Guardian initiative, launched in May 2022 to explore decentralized finance (DeFi) applications and asset tokenization in wholesale funding markets.
Project Guardian, involving JPMorgan, DBS Bank, SBI Digital Asset Holdings, and WisdomTree, seeks to develop open and interoperable networks, institutional-grade DeFi protocols, asset tokenization, and trusted infrastructure. The initiative aims to assess the feasibility of DeFi and asset tokenization on a larger scale. Moody’s, a leading investment risk assessment firm, reported a surge in the value of tokenized funds from $100 million to approximately $800 million, driven by the rising tokenization of U.S. treasuries. Public and private blockchains are witnessing the inclusion of various assets, with examples such as Franklin Templeton’s U.S. Government Money Fund expanding to different platforms and UBS Asset Management deploying a tokenized money market fund on the Ethereum blockchain.
The tokenization of money market funds (MMFs) offers the potential to combine their stability with the technological advantages of stablecoins, according to Moody’s. Recent developments include DigiFT launching US Treasury bill depository receipt (DR) tokens in Singapore, and Turkey’s Misyon Bank partnering with Swiss firm Taurus to leverage digital asset custody and tokenization technology. In the report, Moody’s highlighted the increasing popularity of tokenized funds, driven by the inclusion of various assets on both public and private blockchains. The TokenizeThis event in Miami also showcased the growing interest in industrializing blockchain PoCs and exploring the potential of asset tokenization for investor portfolios.
Overall, financial institutions are collaborating on initiatives like Project Guardian to explore the possibilities of DeFi applications, asset tokenization, and trusted infrastructure. By integrating blockchain technology into traditional financial services, companies like JPMorgan’s Onyx and WisdomTree are aiming to create more efficient and effective solutions for clients. The tokenization of assets, including U.S. treasuries and money market funds, is gaining momentum, offering investors new opportunities for portfolio diversification and risk management. With continued innovation and collaboration in the blockchain space, the future of finance may see a significant transformation towards decentralized and interoperable networks.
