Coinbase plans to launch a tokenized money-market fund, joining the trend of real-world asset （RWA） tokenization and following BlackRock’s $500M BUIDL fund.
Points
- Coinbase to offer a tokenized money-market fund.
- Follows BlackRock’s successful $500M BUIDL fund.
- Aimed at large-scale investors with a conservative approach.
- Part of a broader trend in RWA tokenization.
Coinbase is set to join the RWA tokenization trend by launching a new money-market product. This initiative follows the successful $500M BUIDL tokenized fund by BlackRock. The new Coinbase fund aims to bring real-world asset tokenization to the crypto trading platforms, offering a conservative investment option based on short-term debt instruments.
Money markets are relatively low-risk investments, making them an attractive choice for conservative investors. By tokenizing these assets, Coinbase aims to bridge the gap between traditional finance and the burgeoning world of decentralized finance （DeFi）.
The Coinbase fund will follow the model of the BUIDL token and will initially target large-scale investors. The goal is to leverage Coinbase’s robust infrastructure to attract institutions interested in tokenizing their products on the Base platform.
Crypto Natives Bring Tokenization Up to Speed
Ethereum currently carries the most US government bonds, but other networks like Stellar and Solana are also gaining traction in RWA tokenization. Stellar has attracted $433M in treasuries, while Solana holds $47M in RWA assets.
BlackRock’s BUIDL Token Relies on ONDO Finance
BlackRock’s BUIDL token, which has drawn in $500M as of July 2024, relies on ONDO Finance. This fund is open only to accredited investors with a minimum purchase of $5M, highlighting the exclusivity and high entry barrier for such investment opportunities.
Explanation
- RWA Tokenization: This process involves converting real-world assets like bonds and money-market instruments into digital tokens, making them easier to trade and manage on blockchain platforms.
- Conservative Investment Approach: Money-market funds are low-risk investments, making them suitable for conservative investors looking for stable returns.
- Institutional Interest: The involvement of major financial institutions like BlackRock and Coinbase underscores the growing interest in RWA tokenization and its potential to bridge traditional and decentralized finance.