Ethereum
Ethereum ETF approvals mean asset tokenization is now ‘completely safe’: Securitize CEO
Following Thursday’s approval of spot Ethereum ETFs, a cryptocurrency linked to the tokenization of real-world assets (RWA) has surpassed its previous all-time highs – and the CEO of a BlackRock-backed RWA company tells Decrypt that the approval is optimistic for the principle of tokenization of assets on Ethereum.
Ondo Finance’s governance token surged 16% to $1.10 in the past 24 hours, topping the top 100 crypto market coins by market cap in terms of daily gains, as of time of writing these lines, according to CoinGecko.
The project specializes in offering institutional-grade financial products and services, such as tokens offering US dollar yield or exposure to US Treasuries. In 2022, Pantera Capital and Peter Thiel’s Founders Fund directed a $20 million Series A funding round in the project.
Seemingly affirming Ethereum’s regulatory status as a commodity, the approval of multiple spot ETFs has huge implications for companies focused on creating digital representations of assets that trade on-chain and through associated infrastructure, said Carlos Domingo, CEO of Securitize. Decrypt.
“The most important thing here is not that you can trade an Ethereum ETF,” he said of Thursday’s approvals. “Ethereum, at least from an institutional point of view, is 1716706808 it is completely safe to use because there is no risk that the gas token, ETH in this case, is actually a security.
In March, Ondo said it would transfer $95 million in funds backing its U.S. Treasury-backed token (OUSG) to BlackRock’s BUIDL tokenized fund. Created through Securitize, BlackRock’s BUIDL fund shares are represented by an Ethereum-based token, pegged at a price of $1, and fund subscribers receive a return in the form of additional tokens.
Ondo’s move to BlackRock’s BUIDL fund was about efficiency, Domingo said. The CEO explained that previously, while backing his OUSG token with BlackRock’s iShares Short Treasury Bond ETF, the management of the product was relatively clumsy.
“They didn’t have good control over the underlying asset in terms of rapid issuance, rapid redemption, [and] on the visibility of the channel – that the money is there,” Domingo said. “One of the use cases for BUIDL is that it becomes a base layer that people can build products on top of.”
Ondo did not immediately respond to a request for comment from Decrypt.
BlackRock CEO Larry Fink highlighted tokenization as “new generation for the markets» since 2022, believing that crypto technology could offer financial market participants “reduced fees” and “instant settlement”.
Calling Ondo “very innovative,” Domingo said Ondo’s use of BUIDL reduces five distinct steps – between brokers and custodians who protect assets – in the redemption of Ondo’s products. Before, he said, it took them “two or three days to get the money.”
In light of the approval of Ethereum spot ETFs, Domingo said he expects more serious financial companies to jump into the tokenization space with a cloud of regulatory nervousness recently dissipated.
“In my opinion, [this] is more relevant for tokenization than Bitcoin ETF,” he said. “As I mentioned, it is very clear that [Ethereum is] It is not a commodity, and therefore, using the public Ethereum blockchain is safe from a regulatory perspective.
Edited by Andrew Hayward