Coinbase Asset Management, the asset management division of US-listed cryptocurrency exchange Coinbase, is reportedly planning to create a tokenized money market fund.
The move positions the company in one of the most dynamic sectors of crypto finance, according to those familiar with the plan.
Tokenization, the process of representing ownership of real-world assets (RWAs) through blockchain-based products, has emerged as a major trend in the crypto space. BlackRock, the world's largest asset manager, recently launched a fund called BUIDL that holds U.S. Treasury bonds. The fund quickly amassed $500 million in assets after its launch in March.
Tokenized funds offer investors numerous potential benefits, including the transparency of blockchain-connected assets and the possibility of increased liquidity. For issuers, tokenization can lead to efficiency gains.
For Coinbase Asset Management, the move represents an expansion of the company's ongoing efforts to enter the tokenization space. In December, the company received in-principle approval from a regulator in Abu Dhabi to begin tokenizing traditional assets on Coinbase's Ethereum scaling network, Base.
Sources reveal that Coinbase Asset Management is collaborating with Bermuda-based Apex Group to launch the tokenized fund. Apex Group, which services over $3 trillion in assets across custody, management, custodial and managed funds, is expected to play a key role in this effort.
In March 2023, Coinbase expanded its asset management capabilities with the acquisition of One River Digital Asset Management, leading to the establishment of Coinbase Asset Management.
*This is not investment advice.