A former Grayscale executive asserts that traditional financial institutions have become more eager than ever to convert assets into digital tokens using public blockchains.
In an interview with CryptoMoon, Celisa Morin, formerly Vice President of Platform Distribution at Grayscale until early 2023, shared her perspective that a emerging trend among traditional financial institutions, led by BlackRock, could result in more companies opting to tokenize assets on open-source blockchains rather than private ones.
“I think we see a preference for private chains with JPMorgan’s Onyx. But I do think that this was the narrative a few years back. Now, I think it’s very much the public blockchains.”
Morin has taken over as the leader of Reed Smith’s international law firm crypto team. It’s worth considering that bigger traditional financial institutions, like BlackRock, might take a cue from this move. Notably, BlackRock introduced its $100 million digital asset fund, named ‘BUIDL,’ on Ethereum’s network on March 18.
The BUIDL fund now holds $288 million in assets per Dune Analytics data.
BlackRock’s decision to introduce a fund based on Ethereum sparked debate, as their digital wallet, visible on the blockchain, was soon imitated in playful ways by cryptocurrency fans.
BlackRock received deposits to its public wallet containing questionable transactions that were previously classified as legal but are now prohibited due to Tornado Cash being blacklisted by OFAC. Additionally, there were various cryptocurrencies transferred from real-world asset tokenization projects and memecoins.
Although facing possible legal issues when choosing to tokenize assets on open blockchains rather than secure private networks, Morin stated that numerous companies are expected to follow BlackRock’s example.
“If BlackRock has made these choices, I don’t know why the rest of the crew would be held back.”
Morin pointed out that Franklin Templeton was a step ahead by introducing its tokenized money market fund on the Ethereum scaling solution, Polygon, as early as October the previous year.
Franklin Templeton’s 11-month-old Franklin OnChain U.S. Government Money Fund (FOBXX) holds a combined $360.2 million worth of U.S. Treasury securities. In total, this amount represents $1.08 billion when considering all the tokenized U.S. Treasury offerings, which number 17.
Ethereum ETF in May unlikely
Morin expressed some reluctance towards the prospect of ETH ETFs being authorized by regulatory bodies in May.
Previously collaborating with Grayscale’s legal team before their Bitcoin ETF debut, Morin shared the concern expressed lately about the SEC’s silence towards potential ETF creators, viewing it as an unfavorable indication.
According to Eric Balchunas, a senior analyst at Bloomberg ETF, Morin stated that the possibility of VanEck’s approval by their May 23rd deadline was becoming less likely as the days passed without the SEC providing public comments.
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2024-04-15 04:06