Author: Tom Mitchelhill, CoinTelegraph; Translated by: Wuzhu, Jinse Finance
Traditional financial institutions are more enthusiastic than ever about tokenizing assets on public blockchains, a former Grayscale executive said.
Celisa Morin, who served as Grayscale’s vice president of platform distribution until mid-2023, said in an interview that the new BlackRock-led narrative in TradFi institutions may see more companies seeking to tokenize assets on public chains rather than private chains.
“I think we’re seeing a preference for private chains like JPMorgan’s Onyx. But I do think that was the narrative a few years ago. Now, I think a lot of the focus is on public chains.”
Morin, who now heads the cryptocurrency department at international law firm Reed Smith, explained that it would make sense for large traditional financial institutions to follow the lead of BlackRock, which launched a $100 million tokenized “BUIDL” fund on the Ethereum network on March 18.
The BUIDL fund currently holds $288 million in assets, according to Dune Analytics.
Top tokenized funds for government securities. Source: Dune Analytics
BlackRock’s move to launch a fund on Ethereum was not without controversy, with the asset manager’s on-chain wallet quickly becoming the target of various spoofs from cryptocurrency enthusiasts.
Deposits in BlackRock’s public wallet include legally dubious transactions from Tornado Cash, a now OFAC-approved mixer, as well as various cryptocurrencies from the Real World Asset (RWA) tokenization project and Memecoin.
Morin said many companies may follow BlackRock’s lead, despite the potential legal issues that come with choosing to tokenize assets on a public blockchain, rather than using a private network that is more conducive to KYC and AML.
Morin also noted that Franklin Templeton had already taken the “forward-thinking” step of launching a tokenized money market fund on Ethereum Layer 2 network Polygon last October.
Franklin Templeton’s 11-month-old Franklin On-Chain U.S. Government Money Fund (FOBXX) currently holds a total of $360.2 million in U.S. Treasuries. A total of $1.08 billion in U.S. Treasuries have now been tokenized through 17 products.
Ethereum ETF is unlikely to be launched in May
Morin was less enthusiastic about spot Ethereum exchange-traded funds (ETFs), saying they were unlikely to be approved in May.
Morin, who previously worked with the legal team at Grayscale in preparation for launching a bitcoin ETF, agreed with recent sentiment that the lack of communication between potential fund issuers at the SEC is a bad sign.
Echoing the views of Eric Balchunas, senior ETF analyst at Bloomberg, Morin said VanEck’s chances of getting approval by the May 23 deadline are fading as the SEC refrains from making public comments.
