USDT Tether’s tokenization arm, Hadron, is partnering with ETF provider Kraneshares and Bitfinex Securities to develop and scale financial products, the companies said in a statement Thursday.
The initiative plans to create tokenized versions of exchange-traded products and build the systems necessary for them to trade on regulated digital asset platforms.
The companies plan to test institutional appetite for such products and work on the legal and operational design necessary to bring them to market.
Tether’s Hadron will provide Tokenization Tech, while Bitfinex Securities will offer a licensed trading venue under El Salvador regulation. Kraneshares, the asset manager best known for China-focused ETFs, plans to move fully into tokenized offerings in the coming years.
“We believe that our business in the next three to four years will be 100% tokenized, and this strategic agreement represents an important step towards the future,” said Jonathan Krane, CEO of Kraneshares.
The deal comes as financial institutions explore how to bring real-world assets such as stocks, bonds and ETFs on-chain. The tokenized market is expected to grow from about $30 billion today to trillions by decade, according to industry Projects.
In practice, a tokenized ETF could allow investors to purchase exposure to a fund using digital wallets, with near-instant settlement and fewer intermediaries. Tokenization can also be attractive as a new distribution channel for asset managers, especially in emerging markets where the average investor does not necessarily have broker accounts to access products such as an ETF.
