Capitalization of tokenized treasuries funds. Source: Rwa.xyz<\/figcaption><\/figure>\nEthereum hosts two-thirds of the sector\u2019s capitalization, followed by Stellar with 28.5%, and Solana with 3.66%.<\/p>\n
Opportunities for TradFi<\/h2>\n
O\u2019Neil asserts that tokenized funds offer significant benefits addressing shortcomings of their analogue counterparts.<\/p>\n
The report says that the risk of funds suffering bank runs are mitigated by investors having \u201cround-the-clock\u201d access to on-chain liquidity. It noted that BUIDL allows investors to redeem their shares for USDC stablecoins at any time via smart contract execution \u2014 bypassing the need for intermediaries.<\/p>\n
Shares representing as tokens can also be used as liquid collateral, meaning shareholders do not need to redeem their assets to access their value to use as collateral. Franklin Templeton recently enabled peer-to-peer transfers of FOBXX shares, enabling new use cases for the tokens.<\/p>\n
The report acknowledged that many financial institutions have previously explored tokenization through private chains, but said public networks offer significant liquidity advantages over permissioned networks. \u201cBanks’ tokenization efforts have mainly used private permissioned blockchains, supporting operational efficiencies but not a liquid market in tokenized products,\u201d O\u2019Neil said.<\/p>\n
On-chain treasuries also provide efficiency advantages and accelerated settlement for businesses moving assets across borders, such as multinational corporations.<\/p>\n
O\u2019Neil added that tokenized RWAs benefit on-chain businesses by enabling them to access legacy assets and real-world yields without having to move their assets off-chain.<\/p>\n
\u201cPreviously, crypto-related businesses that earn revenues and pay expenses on-chain have had to choose between investing their cash in riskier on-chain assets or moving it off-chain to invest in traditional cash-equivalent products,\u201d O-Neil said. \u201cThis \u2018off and on-ramping\u2019 process is costly and inefficient. Tokenized Treasuries provide an on-chain solution backed by assets with high liquidity and credit quality.\u201d<\/p>\n
Challenges ahead<\/p>\n
Despite O\u2019Neil\u2019s optimism for the tokenized RWA sector, the report acknowledges that on-chain funds still face significant challenges in the form of regulation and interoperability.<\/p>\n
\u201cEmerging regulatory frameworks in key jurisdictions will enhance investors’ appetite to engage with stablecoins and the features they enable,\u201d he said. \u201cInstitutions need to connect their legacy systems to those blockchains\u2026 In the short term, interoperability challenges will limit the growth of tokenization.\u201d<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"
The esteemed credit rating agency argued that using public blockchains for tokenization offers significant efficiency benefits over legacy financial architecture. S&P Global Rankings, a leading credit rating agency, is bullish on tokenized real-world assets. In a May 14\u00a0report, S&P Global Ratings argues that asset tokenization offers numerous efficiency and operational benefits to asset managers and […]<\/p>\n","protected":false},"author":2,"featured_media":302513,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[274,273,272,244,266,271,268,270,269,267],"class_list":["post-302508","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-de-fi","tag-crypto-finance","tag-decentralized-finance","tag-liquidity","tag-metamask","tag-pancake","tag-slippage","tag-sushiswap","tag-tronlink","tag-trust-wallet","tag-uniswap"],"_links":{"self":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/302508","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/comments?post=302508"}],"version-history":[{"count":3,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/302508\/revisions"}],"predecessor-version":[{"id":302521,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/302508\/revisions\/302521"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media\/302513"}],"wp:attachment":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media?parent=302508"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/categories?post=302508"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/tags?post=302508"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}