The $18 billion asset management firm, F/m, has formally submitted an application to the U.S. Securities and Exchange Commission (SEC) seeking authorization to launch a tokenized Exchange Traded Fund (ETF) tracking US Treasury securities. This strategic move signifies a critical step in bridging traditional finance (TradFi) with decentralized finance (DeFi), leveraging blockchain technology to enhance the accessibility and efficiency of highly liquid, low-risk government debt.
The proposed product aims to represent shares of the standard US Treasury ETF as digital tokens, hosted on a public blockchain infrastructure. This structure promises several advantages over traditional ETF mechanisms, primarily focused on instantaneous, 24/7 settlement and trading capabilities, reduced counterparty risk, and increased operational transparency via the immutable ledger. Furthermore, tokenization allows for greater fractionalization, potentially broadening the investor base.
The SEC filing is particularly scrutinized as it addresses novel regulatory questions concerning the custody, transfer, and record-keeping of tokenized securities within the existing 1940 Investment Company Act framework. F/m must demonstrate robust mechanisms to ensure investor protection, AML compliance, and seamless reconciliation between the digital token holdings and the underlying physical Treasury assets.
Market analysts view F/m’s initiative as a major precedent. If the SEC grants approval, it will validate the use of Distributed Ledger Technology for mainstream, regulated investment products, likely accelerating the adoption of real-world asset (RWA) tokenization across the institutional landscape and setting the stage for similar filings by competing asset managers.
Source: $18B asset manager F/m seeks SEC approval to tokenize US Treasury ETF
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