Guggenheim Treasury Securities (GTS), a subsidiary of financial consulting firm Guggenheim Capital, has issued $20 million worth of Digital Commercial Paper (DCP) on Ethereum.
The DCP received a P-1 credit rating from Moody’s.
According to a Sept. 26 statement, Guggenheim will issue the paper via a blockchain platform developed by Zeconomy called AmpFi.Digital, which offers tokenization services for qualified investors.
Zeconomy CEO Giacinto Cosenza stated:
“With tens of billions of dollars locked in DeFi and corporate treasuries, we are thrilled to partner with GTS to address a clear need for more trusted and secure blockchain solutions.”
The move comes as the tokenized US treasuries market surpassed $2 billion in market cap, with the participation of traditional finance heavyweights such as asset managers BlackRock and Franklin Templeton.
BlackRock’s tokenized fund BUIDL has a market cap of over $513 million, while Franklin Templeton’s FOBXX trails close with $435 million.
Additionally, AmpFi.Digital stated in the announcement that it aims to address key decentralized finance (DeFi) challenges such as poor credit quality, high fees, and compliance issues.
Cosenza added that the approval of crypto exchange-traded funds (ETF) in the US and the substantial growth in the tokenization market this year highlighted institutional demand for crypto.
Bullish developments for Ethereum
Notably, nearly $1.6 billion of all tokenized U.S. treasuries are issued using Ethereum as an infrastructure.
In addition to BlackRock’s BUIDL, Ondo’s USDY and OUSG and Hashnote’s USYC significantly increase the blockchain’s participation in the tokenized government securities ecosystem.
Moreover, CoinDesk reported on Sept. 25 that Visa plans to create a platform that will help institutional firms issue fiat-backed tokens. Ethereum’s infrastructure will also power the Visa Tokenized Asset Platform (VTAP).
Solana is a rising contender
Solana holds just 5.5% of the tokenized US government securities market as of Sept. 26, with $122.7 million in tokens issued on the network.
However, Franklin Templeton and Citigroup recently announced they are eyeing Solana for their next financial products exploring blockchain technology.
During Solana’s ecosystem-focused event Breakpoint, Franklin Templeton revealed its plans to launch a mutual fund natively on Solana. Meanwhile, Citi is considering tapping the network for money programmability through smart contracts aimed at cross-border payments.
Mentioned in this article
Credit: Source link