RWA is so fragrant! Coinbase Asset Management plans to launch a tokenized market fund.

Coindesk reported that the U.S. exchange Coinbase is following the footsteps of local banking giants by entering the tokenized market. Its asset management department is reportedly in discussions with financial services provider Apex Group to create a tokenized money market fund.

Coinbase Intends to Create Tokenized Fund Products

Insiders revealed that Coinbase, the current custodian of the top eight Ethereum ETFs, is partnering with Apex Group through its institutional asset management company, Coinbase AM, to launch a tokenized cryptocurrency market fund.

As part of its ongoing foray into tokenization, Coinbase AM acquired digital asset management company One River last March and launched the digital asset management platform "Project Diamond" in December last year, combining its technical advantages in Coinbase Prime, Web3 wallet, and L2 network Base to bridge traditional assets to the chain.

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Reportedly, Apex Group, a financial services company, provides fundraising, financial product custody, and regulatory compliance services to financial institutions, asset managers, and enterprises.

RWA Becomes a Hot Topic Among Institutions

The technology and applications of RWA have been around for years and have flourished with the launch of "BUIDL," a dollar-denominated institutional digital liquidity fund by asset management giants BlackRock and Franklin Templeton, as well as "FOBXX," Franklin Templeton's OnChain U.S. government money fund.

Data from the tokenized asset analysis platform RWA.xyz shows that the former reached a scale of $500 million within four months of its launch, while the latter closely followed with a market value of $420 million.

Evidently, tokenization based on blockchain technology has become a hot topic shared by both cryptocurrency and traditional finance. Numerous financial giants such as Fidelity, Goldman Sachs, and BNY Mellon have expressed interest this month in applications such as tokenized bonds, stablecoins, and deposit tokens:

When you look back over the past year, almost every bank, broker-dealer, or asset management company has been discussing how to issue traditional assets on permissioned or public blockchains.

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For investors, tokenized products offer transparency and higher potential liquidity, while for issuers, tokenization brings efficiency improvements.

However, a report from the World Federation of Exchanges (WFE) last month also indicates that while tokenization can be an innovative solution for traditional finance, it is not a panacea for all financial institutions and is still subject to limitations in terms of technology and regulation.

Decrypting Tokenization: RWA Overhyped, Asset Tokenization Could Pose Issues