WisdomTree Enhances Tokenized Money Market Fund
On Tuesday, WisdomTree announced a groundbreaking enhancement to its tokenized money market fund, allowing for instantaneous settlement. This new development liberates the fund from the conventional pace of Wall Street, effectively eliminating the delays that often create “cash drag” in traditional financial markets. With approximately $168 billion in assets under management, WisdomTree aims to leverage the inherent benefits of digital assets to create a more fluid trading experience.
New Trading Model for WTGXX
The newly implemented trading model for the WisdomTree Treasury Money Market Digital Fund (WTGXX) permits transactions around the clock. This shift was made possible by obtaining exemptive relief from the Securities and Exchange Commission (SEC). According to recent statements from the SEC, investors can now purchase WTGXX shares at a fixed price of $1 throughout the trading day, irrespective of the fund’s net asset value, which is typically calculated only after the close of U.S. markets each day.
Regulatory Approval and Digital Cash
Historically, funds governed by the Investment Company Act of 1940 served mainly as vehicles for investment, but the SEC’s approval categorizes WisdomTree’s offering as a type of digital cash—enabling real-time trading, movement, and spending.
WisdomTree has prominently described this capability as “unprecedented,” highlighting the improved efficiency and liquidity that digital asset representations deliver.
Additionally, the company revealed that its broker-dealer subsidiary has received approval from FINRA to conduct principal trading for WTGXX, further enhancing the liquidity of the tokenized money market fund and allowing for conversions into stablecoins at any time.
Dividend Accrual and Blockchain Technology
Importantly, the fund maintains its dividend accrual feature. Utilizing blockchain technology, it employs timestamps to track investors’ holding periods, ensuring that shareholders continue to earn yields even as tokens are transferred between wallets. As of Tuesday, WTGXX’s valuation stood at $730 million, with its issuance spanning nine blockchain networks, including Ethereum and Solana, and offering a competitive annualized yield of 3.5%. Designed to be backed by U.S. Treasury securities, the shares are structured to trade at a stable value of $1, akin to a stablecoin.
Significance of the Development
This development signifies an important shift as the SEC grows more receptive to financial products enhanced by blockchain technology. In their ruling, the SEC acknowledged that the approval aligns with public interest. SEC Chair Paul Atkins had earlier indicated a commitment to modernizing regulations through an initiative referred to as “Project Crypto,” which aims to facilitate on-chain transactions in financial markets.
In a statement, Will Peck, WisdomTree’s Head of Digital Assets, remarked on the transformative potential of this approval, asserting that it represents a significant advancement for investors and exemplifies how blockchain technology can serve as a new foundation for capital markets.
