Libeara and FundBridge Capital Launch Tokenized US Treasury Fund on Avalanche
Libeara and FundBridge Capital have announced the launch of a tokenized United States Treasury bill (T-Bill) fund on the Avalanche (AVAX) blockchain network, as detailed in a November 12 post on X. This fund, named the Delta Wellington Management Short Treasury On-Chain Fund, is designed to provide a transparent, auditable, and efficient way to access US Treasuries through blockchain technology.
Key Features of the Delta Wellington Management Short Treasury On-Chain Fund
The Delta Wellington fund aims to simplify and streamline the process of investing in US Treasuries by offering a tokenized asset model. According to Avalanche, the fund has been structured to support:
- Subscriptions to tokenized US Treasuries
- Seamless transferability of tokenized assets
- Efficient redemption processes for tokenized US Treasuries
This fund exemplifies how blockchain technology can enhance financial accessibility and operational efficiencies within the fixed-income market.
About Libeara and FundBridge
Libeara, based in Singapore, specializes in tokenization solutions, while FundBridge offers compliance and asset management tools for investment managers. The partnership leverages blockchain to streamline processes for investors seeking on-chain access to real-world assets.
Mark Garabedian, FundBridge’s Director of Digital Assets and Tokenization, commented on the fund’s potential benefits, stating, “By leveraging blockchain technology, FundBridge can deliver enhanced access and operational efficiencies.”
Surging Demand for Tokenized Real-World Assets (RWAs)
Investor demand for tokenized real-world assets (RWAs) continues to grow, especially for assets like US T-Bills that offer low-risk returns. The market for tokenized US treasury debt currently has a total value locked (TVL) of around $2.3 billion, according to data from RWA.xyz as of November 12.
Some of the largest tokenized Treasury funds include:
- BlackRock USD Institutional Digital Liquidity Fund (BUIDL): Assets under management (AUM) of approximately $510 million
- Franklin OnChain US Government Money Fund (FOBXX): AUM of approximately $450 million
The Potential of Tokenization in Financial Markets
Tokenization of assets extends beyond Treasuries to other asset classes like artwork, real estate, and equities, with the global market potential estimated at around $30 trillion. Colin Butler, Polygon’s Global Head of Institutional Capital, emphasized this in a recent interview, underscoring tokenization’s capacity to create new liquidity opportunities.
Additionally, the US Department of the Treasury highlighted in its Q4 2024 report that tokenization could improve liquidity and reduce operational and settlement frictions in Treasury trading.
Avalanche’s Role in Securities Tokenization
Avalanche is emerging as a key platform for tokenizing traditional securities. In September, the Depository Trust and Clearing Corporation (DTCC), the central clearinghouse for US securities trades, completed a pilot program exploring tokenized US Treasury bills as trading margins on Avalanche’s Evergreen subnet.
Broader Context: US Regulators and Cryptocurrency ETFs
In related developments, cryptocurrency ETFs are also gaining traction in the US. Following regulatory approval, Grayscale revealed a proposal to list an ETF that would hold a diversified basket of cryptocurrencies, including Bitcoin (BTC), Ether (ETH), Solana (SOL), Avalanche (AVAX), and XRP. This move could provide investors with broader exposure to the crypto market through regulated financial products.
The growing intersection between traditional finance and blockchain technology, demonstrated by initiatives like Libeara and FundBridge’s tokenized US Treasury fund, reflects a shift towards more accessible and efficient financial ecosystems.
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