Tokenized Funds Skyrocketed to $800M Value in 2023, Sparked By US Treasury Tokenization: Moody’s
The growing trend of tokenizing traditional assets has caught the attention of legacy financial institutions.
According to a recent report by Moody’s, a leading investment risk assessment firm, the value of tokenized funds has surged from $100 million at the beginning of 2023 to approximately $800 million today, driven by the rising tokenization of U.S. treasuries.
The report highlighted that both public and private blockchains are witnessing the inclusion of various assets.
Some of the more notable examples include Franklin Templeton’s U.S. Government Money Fund expanding from Stellar to Polygon, Backed Finance launching a tokenized short-term U.S. treasury bond exchange-traded fund (ETF), and UBS Asset Management deploying a tokenized money market fund (MMF) on the Ethereum blockchain.
According to Moody’s, the tokenization of MMFs offers the potential to combine their stability with the technological advantages of stablecoins.
Additionally, the applications of tokenized MMFs extend beyond simple purchasing and holding until maturity, indicating the potential for a wider range of uses.
The report also emphasized the significant efficiency benefits of tokenized assets, which could drive further adoption among traditional investors.
Moody’s suggested that tokenized funds can enhance market liquidity and accessibility, reduce costs, enable fractionalization, decrease dependence on intermediaries, shorten settlement times, automate processes through smart contracts, and enhance transparency.
RWA & Tokenization: Moody's highlighted the growing adoption of blockchain-based tokenized funds, stating that it improves the efficiency of investing in assets like government bonds, funds and represents untapped market potential.
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