WisdomTree’s Latest ‘Blockchain-Enabled’ Funds To Use Ethereum, Stellar
The asset manager’s nine newest digital funds are slated to debut on the WisdomTree Prime app next quarter
WisdomTree modified by Blockworks
The SEC has OK’d nine more WisdomTree blockchain-enabled funds as the asset manager gets set to roll them out on its mobile app in the coming months.
WisdomTree’s funds are the latest step toward the asset manager’s goal to bring fixed income, equities and commodities into the digital world through funds and tokenized exposures.
The new products do not invest in crypto. However, the funds’ transfer agent, Securrency Transfers, maintains a secondary record of share ownership on the Stellar or Ethereum blockchains — hence “blockchain-enabled.” Securrency keeps the primary record of share ownership for the funds in “its own books-and-records,” a spokesperson told Blockworks.
Among the new offerings are funds that invest in US Treasurys. The firm has also gained approval for the WisdomTree 500 Digital Fund — its first digital fund seeking to track performance in the US equity market.
Each fund is set to be available only via the WisdomTree Prime mobile application, which is in beta testing and is on track for a national rollout next quarter.
End users won’t be able to verify their ownership themselves without the app, say via the Ethereum or Stellar blockchain directly. But the firm believes the secondary record provides its funds with the potential to unlock use cases for these assets.
Will Peck, WisdomTree’s head of digital assets, told Blockworks there may be distribution opportunities in the future, saying:
“We believe that blockchain-enabled finance has the potential to improve the investor experience through enhanced liquidity, transparency and standardization, which we aim to achieve over time, and these nine digital funds are setting the foundation as we seek to bridge the gap between traditional finance and digital finance today.”
Though Peck declined to comment on future products, he told Blockworks in an email that WisdomTree Prime intends to offer “a highly curated experience” for investors that brings mainstream exposures to the blockchain.
“With this in mind, we are continuously evaluating what types of products would complement one another and contribute to this strategically designed suite of product offerings, he added.
WisdomTree has roughly $81 billion in assets under management. A majority of those assets are in its 78 ETFs trading in the US, according to ETF.com.
WisdomTree finds crypto interesting but more into blockchain
The news comes after the firm gained SEC approval to launch its Short-Term Treasury Digital Fund in September.
That fund, which invests in short-term US Treasury obligations, is also set to digitize its fund share ownership record on the Ethereum or Stellar blockchains.
WisdomTree executives said during the company’s earnings call in October that blockchain-enabled digital wrappers are the future of asset management.
CEO Jonathan Steinberg said at the time that the company has so far spent about $20 million on its tokenization and WisdomTree Prime efforts. The firm, for example, is building out the app’s ability to initially allow users to transfer tokenized assets such as dollars, gold, Treasurys, bitcoin and ether.
“Crypto’s interesting, but the real opportunity is blockchain-enabled finance,” WisdomTree Chief Operating Officer Jarrett Lilien added during the call. “It’s a mistake to confuse crypto, which is a use case for the blockchain…with the broader opportunity we’re pursuing.”
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