Abu Dhabi firm to launch tokenised US Treasuries fund

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Realize, an Abu Dhabi-based technology firm, has launched an investment vehicle that will buy units of exchange-traded funds (ETFs) focused on US Treasury bills and convert these assets into digital tokens that can be held, traded and transferred on a blockchain.

The fund is called Realize T-BILLS Fund, and it will buy BlackRock’s iShares and State Street’s SPDR, tokenise units from these ETFs, and incorporate them within the fund, Dominik Schiener, co-founder of Realize, told Reuters in an interview. It hopes to grow to a $200m fund.

Tokenised Treasuries are a growing segment of the crypto market, with a market capitalisation of $2.4bn on public blockchains, primarily Ethereum, according to data platform rwa.xyz.

They are effectively digital tokens created on a blockchain-backed by US government debt and issued both by blockchain-native firms and traditional institutions, notably BlackRock and Franklin Templeton.

BlackRock launched its first tokenised fund, BUIDL, on the Ethereum blockchain in March. It invests 100 percent of its assets in cash, US Treasury bills, and repurchase agreements or repos. The BlackRock fund has a current market cap of $530m.

The Realize fund, the first tokenised fund to be domiciled out of the Abu Dhabi Global Market and approved by its regulatory authority, will issue the $RBILL token and will serve as the digital representation of the units of the fund. They will initially launch on both IOTA and Ethereum blockchain networks.

The fund will be managed by Neovision Wealth Management, which is also based in the UAE.

“The goal is to bring fungible assets on chain. T-Bills are the most liquid asset today in the real world,” said Schiener. “They’re also the best form of collateral, paying around 5 per cent.”

Dr. Ryan Lemand, co-founder and chief executive officer of Neovision, said it makes sense to buy T-Bill ETFs and tokenise them instead of outright purchasing Treasury bills in the market. He noted buying cash Treasuries in the market would involve continuous transaction costs because they will have to be bought again and again.

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