WisdomTree to leave ‘no stone unturned’ with new blockchain-native app: CEO

WisdomTree is seeking to take advantage of what its CEO called an “early mover status in tokenization” following the launch of its blockchain-enabled consumer app.

Executives at the firm, which manages roughly $97 billion, said expanding the reach and capabilities of the product released earlier this month is a major second-half focus.

The company first previewed its plans for the app, WisdomTree Prime, in January 2022. Upon launch, the app was available in 21 states, with the firm looking to add additional locations in the coming months.

WisdomTree Prime currently runs nine digital funds — with share ownership records kept on the Stellar or Ethereum blockchains — as well as dollar and gold tokens, bitcoin (BTC) and ether (ETH).

“We will look to leverage our multi-year headstart through additional products with the Prime ecosystem, but also explore potential third-party distribution opportunities as well,” WisdomTree CEO Jonathan Steinberg said on a Friday earnings call.

Additional features such as peer-to-peer transfers and payments are in the works.

Will Peck, WisdomTree’s head of digital assets, noted the app’s “ambitious product roadmap” though he shared few specifics. One focus is making US floating rate notes or gold “more like currency” — allowing it to be more transactable via debit cards, for example.

While organic growth of retail users will be a focus, Steinberg said the company will explore business-to-business opportunities.

“[With] financial services firms looking to leverage blockchain tech, tech firms looking to deepen relationships with customers or institutional players looking for on-chain use cases with a more regulated product set, we have lots of opportunity with many ways to grow the WisdomTree Prime platform,” Steinberg said.

Seeking to lead a nascent segment

Steinberg said the firm is set to leave “no stone unturned” on its Prime efforts as competitors are beginning to realize the potential value of asset tokenization.

BlackRock CEO Larry Fink has said he believes the tokenization of securities is “the next generation for markets.”

Franklin Templeton, another fund giant with more than $1 trillion in assets under management, debuted a money market fund that used a public blockchain to record transactions in 2021. It continues to work with the SEC to unlock various features that blockchain technology enables for mutual funds, Digital Assets Head Roger Bayston told Blockworks last month.

“This is not only a validation of our tokenization strategy, but also underscores the strong position that WisdomTree is in being an early mover and the first with any sort of robust product set,” Steinberg said.

The CEO’s comments come a week after the firm filed to launch the WisdomTree Government Money Market Digital Fund.

The planned fund — to hold government securities, cash and repurchase agreements collateralized fully by government securities or cash — seeks to maintain a $1 net asset value (NAV) per share. Like WisdomTree’s other digital funds, the ownership of its shares would be digitized on the Stellar or Ethereum blockchains.

WisdomTree also re-filed for a spot bitcoin ETF last month.

The SEC turned down WisdomTree’s first spot bitcoin ETF application in December 2021 and rejected its second bid in October 2022 — a familiar fate for competitor would-be issuers over the last decade.

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