According to a new Moody report, a new class of digital financial products bridge by 2021 since 2021, which is a new class of digital financial products, has increased to reach $ 5.7 billion since 2021.
Credit rating service looks at the increasing interest from traditional asset managers, insurers and brokerage that looks at the customers’ access between fiat and digital markets. The June 3 report shared with cointelegraph stated, “The short -term liquidity funds that have been token are a small but fast growing products.”
These funds, usually supported by American Treasury or other low-risk property, work similar to traditional money market funds, but use blockchain to release and manage partial shares, enabling real-time disposal. Data from the Federal Reserve suggests that the US Money Market Funds organized approximately $ 7 trillions in total assets by December 2024.
According to Moody’s, emerging use for token funds may involve yield adaptation for institutional investors, stabelcoin, liquidity management for insurance companies, and use as collateral in business and lending operations.
“We hope that the AUMs of this place will grow to grow as most of the major wealth brokerage, private banks and asset management platforms that offer digital assets will possibly use a cash-wheel-type product such as a token-short-work liquidity fund, which are regularly to transfer any cash without a yield earning product.”
A handful of players are leading the growth of the region. The USD of Blackrock leads the pack with $ 2.5 billion in assets under institutional digital liquidity fund management, followed by Franklin Templeton’s onchain US Government Money Fund $ 700 million with $ 700 million. Other major players include superstates, Ondo Finance and Circle, whose funds manage each $ 480 million and $ 660 million.
Companies are also looking at tokens as a tool to access broad markets. German protocol Midas recently An announcement of a token certificate Offered exposure to government bonds for government bonds, supported by American Treasury Bills, supported by American Treasury Bills for European investors.
In May, brokerage firm Robinhood took a similar step to offer investors in Europe in American markets. Also, the company recently Presented a proposal For the US Securities and Exchange Commission (SEC) for a token regulatory structure in the country. According to Robinhood CEO Vlad Tenav, “Tokenization represents a new paradigm for institutional property allocation.”
Beyond the credit and liquidity risk of money market instruments, token funds also face blockchain technology -related weaknesses, report note. These include Smart Contract Falls, Cyber Threat, Network Availability and Regulatory Uncertainty.
The report said, “(…) Asset Representation Risk may arise from discrepancies related to the legal ownership of shares between the Risk Blockchain Registry and other shareholder records.”
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