Guggenheim Treasury Tokenizes Commercial Paper on Ethereum With $20 Million Tokenization
Tokenizing $20 million worth of commercial paper on the Ethereum blockchain, Guggenheim Treasury Services, a division of the esteemed Guggenheim Capital, is making a revolutionary action in the banking industry. For the digital version of commercial paper, a temporary unsecured debt instrument used by businesses to cover immediate financial needs, this is first.
An announcement claims that this novel product has a P-1 credit rating, the highest grade Moody’s can provide, therefore highlighting its dependability and security. Considered as one of the main systems for handling asset-backed commercial paper (ABCP), Guggenheim Treasury has issued and redeemed approximately $10.3 trillion in ABCP over the previous 27 years.
Specializing in the trading and regulation of tokenized assets, Zeconomy’s AmpFi.Digital platform helped with tokenization. Like conventional commercial paper transactions in over-the-counter marketplaces, this digital commercial paper will trade on-chain after issuing, therefore enabling fractionalization and speedier settlement times.
Giacinto Cosenza, CEO of Zeconomy, said he was excited about the deal as the success of crypto ETFs and the growth of the tokenization industry point to a notable demand for digital assets. Just the market for tokenized government securities has expanded to control assets valued about $1.9 billion.
With more than $522 million in tokenized securities, BlackRock presently boasts the largest on-chain securities asset fund. Driven by growing institutional involvement and blockchain technology developments, a recent research projects that the worldwide market for tokenized assets might reach an amazing $10 trillion by 2030.
More financial institutions are investigating the possibilities of tokenization as Ethereum makes up 58% of the market and tokenized assets are now valued at around $118.57 billion globally. Notably, working with 26 market players on the Canton Network, the Depository Trust & Clearing Corporation recently finished a trial operation employing “digital twins” of U.S. Treasury bonds.
Among financial companies, the movement toward tokenizing conventional financial instruments—known as real-world assets (RWA)—is gathering steam. Including $2 billion in tokenized U.S. government securities, this industry has now a market capitalization of $12 billion.
Given more money flows into distributed finance and corporate treasuries, Cosenza underlined the need of offering trustworthy blockchain solutions. In the changing scene of today, he saw that new creative and safe financial solutions are obviously needed.
Although Guggenheim, with assets under control of $300 billion, is new in tokenizing commercial paper, the company has a past in interacting with the bitcoin market. Now acknowledged as a spot Bitcoin exchange-traded fund, the erstwhile Grayscale Bitcoin Trust has been allowed to receive up to 10% investment from its Macro Opportunities Funds.
