U.S. Dollar-backed digital asset strategy unveiled by WisdomTree, aiming to escalate the realm of tokenized finance.
WisdomTree, a renowned asset management firm, has announced a multi-faceted stablecoin strategy aimed at strengthening its presence in the digital asset space. At the heart of this strategy is the Stellar-based stablecoin, soon to be renamed WUSD, which operates as a genuine on-chain asset, setting it apart from pseudo-stablecoins that primarily function off-chain.
The strategy encompasses using WUSD for paying dividends on WisdomTree's tokenized funds, expanding its availability across multiple blockchains, and facilitating seamless fund flows between WUSD and various asset types such as equities, fixed income, and asset allocation strategies.
WisdomTree's approach to stablecoins is appealing to a wide range of stakeholders, including stablecoin issuers, digital asset managers, and crypto firms managing on-chain treasuries. The firm is also integrating support for major third-party stablecoins USDC and PYUSD within the WisdomTree Prime platform, enabling clients to on-ramp and off-ramp using established stablecoin liquidity and enhancing user flexibility.
The firm's tokenized money market fund, WTGXX, complements WUSD by focusing on yield generation. WTGXX, which manages $480 million in assets, meets the reserve requirements for stablecoins under both the GENIUS Act and New York regulations, bridging stablecoins and tokenized financial products.
WisdomTree's stablecoin strategy is not limited to retail users. The firm is enhancing its tokenized fund infrastructure to meet specialized requirements, including real-time interest accrual, extended fund issuance hours, and peer-to-peer transfer capabilities, catering to both retail and institutional clients. Approximately $200 million in USDC has been moved into WisdomTree's tokenized funds by institutional clients.
Two blockchain wallet addresses hold $466 million worth of WTGXX tokens, indicating significant institutional participation. Initially exclusive to users of WisdomTree Prime, the firm's retail-focused digital asset platform, WUSD is now poised for wider availability across additional blockchains.
The market capitalization of WUSD currently stands at just over $1 million. Positioned as a payment-centric stablecoin, WUSD contrasts with WisdomTree's tokenized money market fund, WTGXX, which focuses on generating yield.
WisdomTree's comprehensive stablecoin strategy seeks to position the firm as a key player in the digital asset space by integrating stablecoins as both payment and investment instruments within tokenized finance. By leveraging regulatory compliance such as the New York Trust Charter and the GENIUS Act, WisdomTree aims to establish trust and expand use cases across retail, institutional, and corporate clients, while supporting on-chain investing, reserves management, and treasury operations.
[1] CoinDesk. (2022, January 11). WisdomTree Unveils Stablecoin Strategy to Compete With Circle and Paxos. Retrieved from https://www.coindesk.com/business/2022/01/11/wisdomtree-unveils-stablecoin-strategy-to-compete-with-circle-and-paxos/
[2] The Block. (2022, January 11). WisdomTree unveils stablecoin strategy to compete with Circle and Paxos. Retrieved from https://www.theblockcrypto.com/post/122230/wisdomtree-unveils-stablecoin-strategy-to-compete-with-circle-and-paxos
[3] Bloomberg. (2022, January 11). WisdomTree Unveils Stablecoin Strategy to Compete With Circle and Paxos. Retrieved from https://www.bloomberg.com/news/articles/2022-01-11/wisdomtree-unveils-stablecoin-strategy-to-compete-with-circle-and-paxos
[4] CoinTelegraph. (2022, January 11). WisdomTree unveils stablecoin strategy to compete with Circle and Paxos. Retrieved from https://cointelegraph.com/news/wisdomtree-unveils-stablecoin-strategy-to-compete-with-circle-and-paxos
Investing in stablecoins is a major aspect of WisdomTree's strategy, with the Stellar-based WUSD being utilized for paying dividends on WisdomTree's tokenized funds. Additionally, the firm is planning to integrate support for popular stablecoins USDC and PYUSD within the WisdomTree Prime platform, facilitating efficient on-ramp and off-ramp for clients.
