Bank of America (BAC) Seeing the tokenization, creating a virtual investment vehicle in blockchain linked to a tangible possession, such as the next phase in the evolution of investment products, which describes it as “Mutual Fund 3.0,” Wall Street Bank said in a Friday’s report.
As the first fund first appeared in 1924 and the funds exchanged by the exchange (ETFS) Reshaped Investing in the 2000s, blockchain technology could support a new generation of financial vehicles, analysts led by Craig Siegenthaler wrote.
Real world asset (RWA) Tokenization is moving fast. Bank noted that companies like Securitize are working with managers including Blackrock (Blk)Apollo, KKR and Hamilton Lane to issue tokenized funds. Asset Manager WisDomtree (Wt) Established its own tokenization engine, giving it the ability to offer more than a dozen funds tokenized.
According to data provider RWA.xyz the value of real-word assets represented by on-chain exceeded $ 28 billionmainly in private credit and wealth.
However, the regulation remains a headwind. The Genius and Clarity The actions respond to stablecoins, but left many questions about tokenized funds that have not been resolved. However, the bank has argued, the benefits of tokenization will bring adoption over time despite limited access for US investors today.
Case for tokenized equities is weak because US brokers offer stock-free stocks and funds exchanged by exchange (ETF) trading after Robinhood’s (Hood) In 2019 interruption, the analysts wrote.
That shift has pushed companies towards the monetization of cash cash and order flow, making the tokenized versions of these possessions less engaging, bank analysts said. But tokenized funds in the currency market, boosted by smart contracts, can raise cash sweep economics and open new revenue models.
The distribution is still the bottleneck. Platforms that offer tokenized funds will remain rare, even online brokers such as Robinhood, Public and Ethoro (Come) are well positioned provided by their crypto and younger businesses, bases dedicated to self-oriented. Coinbase (Coins) It may also appear as a partner as it expands despite pure crypto, the report added.
The Bank of America expects tokenized funds in the money market to rule over the adoption thanks to their attractive -the yield associated with Stablecoins, which cannot pay interest under the Genius Act, with private credit and high yields likely to follow.
Read more: Boerse Stuttgart opens a pan-European Settlement Platform for Tokenized Assets
