The short -term tokenized funds, a new class of digital financial products, punching on traditional and decentralized finances, have grown up to reach $ 5.7 billion in assets since 2021, according to a new Moody’s report.
The credit rating service sees growing interests of traditional asset managers, insurers and brokerage houses that seek to offer customers access between the Fiat and Digital Markets. “Tokenized short -term liquidity funds are a small product but rapidly growing,” notes a June 3 report shared with Cointelegraph.
These funds, generally supported by the American treasures or other low -risk assets, operate in a similar way to the market funds of traditional money, but use blockchain to issue and manage fractional actions, allowing real -time regulations. Data from the Federal Reserve show that American money market funds held around 7 billions of dollars in total assets in December 2024.
According to Moody’s, emerging use cases for token funds may include the optimization of returns for institutional investors against stablescoins, liquidity management for insurance companies and use as guarantee in negotiation and loan operations.
“We expect the alms of this space to increase, because most of the main houses of wealth houses, private banks and asset management platforms that offer digital assets will probably use a cash type product, such as a short -term short -term liquidity fund to regularly move money not invested in a performance product.”
A handful of players leads the growth of the sector. The USD Institutional Digital Liquidity Fund of Blackrock leads the pack with $ 2.5 billion in management assets, followed by the Franklin Templeton US Government Money Fund with $ 700 million. The other key players include superstate, Ondo Finance and Circle, each of which manages between $ 480 million and $ 660 million.
Companies also consider tokenization as a tool to reach wider markets. German Midas protocol recently Announced a token certificate Supported by American Treasury bills for European investors, offering exposure to state obligations bearing the return without any minimum investment required.
In May, brokerage company Robinhood made a similar decision to offer investors in Europe an exhibition to US markets. In addition, the company recently subject a proposal to the American Commission for Securities and Exchange (SEC) for a regulatory framework for tokenization in the country. According to the CEO of Robinhood, Vlad Tenev, “tokenization represents a new paradigm for the allocation of institutional assets”.
Beyond the credit and liquidity risks typical of the monetary market instruments, tokenized funds are also faced with vulnerabilities linked to blockchain technology, notes the report. These include intelligent contract defects, cyber-men, the availability of the network and regulatory uncertainty.
“”[…] Risks of asset representation may result from differences between the blockchain register and other shareholders’ files concerning the legal property of actions, ”says the report.
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