Abu Dhabi-based firms Realize and Neovision Wealth Management have introduced an investment vehicle designed to acquire units of exchange-traded funds (ETFs) centered on U.S. Treasury bills. These assets will then be converted into digital tokens, facilitating their storage, trading, and transfer via blockchain technology.

Named the Realize T-BILLS Fund, this initiative will procure ETFs from BlackRock's iShares and State Street's SPDR, subsequently tokenizing these units and integrating them into the fund. Dominik Schiener, co-founder of Realize, shared this information in an interview with Reuters. The fund aims to expand its value to $200 million.

Realize will oversee the tokenization of the T-BILLS Fund units, while Neovision Wealth Management will handle its management. Tokenized Treasuries represent a burgeoning sector within the cryptocurrency market, currently holding a market capitalization of $2.4 billion on public blockchains, predominantly Ethereum, as per data from rwa.xyz.

These tokenized assets are essentially digital tokens created on a blockchain, backed by U.S. government debt. They are issued by both blockchain-native firms and traditional institutions, including BlackRock and Franklin Templeton. In March, BlackRock launched its inaugural tokenized fund, BUIDL, on the Ethereum blockchain, investing entirely in cash, U.S. Treasury bills, and repurchase agreements. This fund currently boasts a market cap of $530 million.

The Realize fund, the first tokenized fund to be established outside the Abu Dhabi Global Market, will issue the $RBILL token, serving as the digital counterpart for the fund's units. Initial deployment will occur on both the IOTA and Ethereum blockchain networks.

Dominik Schiener emphasized the goal of making fungible assets accessible on the blockchain, highlighting T-Bills as the most liquid asset in the real world and an optimal form of collateral, currently yielding around 5%.

Dr. Ryan Lemand, co-founder and CEO of Neovision, explained the rationale behind purchasing T-Bill ETFs and tokenizing them, rather than directly acquiring Treasury bills. He pointed out that the continuous transaction costs associated with repeatedly buying cash Treasuries in the market make ETFs a more practical choice.

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