WisdomTree recently unveiled a tokenized real-world assets (RWA) platform, with the goal of allowing users to eventually access the asset manager’s regulated fund tokens from any type of wallet or blockchain network. This announcement was made on September 18th.
The platform, known as WisdomTree Connect, will initially store users’ tokenized investment funds with third-party custodians while providing a “digital record” of ownership to the user’s personal wallet, according to WisdomTree. The long-term objective is to broaden access to its RWAs to other customer-facing platforms and apps, as well as to retail users with self-hosted wallets.
WisdomTree currently offers over a dozen tokenized funds, with assets including tokenized claims on financial assets, commodities, and art, which represent a total value locked of over $12 billion. Colin Butler, Polygon’s global head of institutional capital, noted that RWAs present a $30 trillion market opportunity globally in August.
The United States Securities and Exchange Commission (SEC) requires that tokenized investment funds be held by a qualified third-party custodian. This regulation has hindered adoption among crypto-native users, who prefer to “self-custody” tokens in user-managed wallets. Franklin Templeton’s Roger Bayston stated in August that they are working with the SEC to enable users to manage their wallets independently of the wallet environment provided by the company.
WisdomTree manages more than a dozen tokenized investment funds, with holdings that include money market instruments, S&P 500 stocks, and US treasury bonds of various durations. Among the most popular tokenized RWAs are those representing claims on off-chain money market funds. The BlackRock USD Institutional Digital Liquidity Fund (BUIDL) and Franklin OnChain U.S. Government Money Fund (FOBXX) are the largest by assets under management (AUM), with approximately $520 million and $430 million, respectively. In contrast, WisdomTree’s tokenized money fund, Government Money Market Digital (WTGXX), has less than $8 million in AUM as of September 18th.
By expanding RWA access to user-managed wallets and integrating with more blockchain networks, WisdomTree Connect aims to address a significant issue for firms seeking integration between traditional and decentralized finance.