A growing number of TradFi firms may look to follow BlackRock’s lead and opt for tokenizing real-world assets on public blockchains in place of gated, private networks.
Celisa Morin, the head of legal at Reed Smith and a former executive at Grayscale, says traditional financial institutions will likely follow BlackRock’s lead in using public blockchains. Traditional financial institutions are more keen on tokenizing assets on public blockchains than ever before, says a former Grayscale executive.
Speaking with Cointelegraph, Celisa Morin, who served as Vice President of Platform Distribution at Grayscale until mid-2023, said that a new BlackRock-led narrative among TradFi institutions could see more firms look to tokenize assets on public chains over private ones. “I think we see a preference for private chains with JPMorgan’s Onyx. But I do think that this was the narrative a few years back. Now, I think it's very much the public blockchains.” Morin is now the head of international law firm Reed Smith’s crypto department, explaining it would make sense for larger traditional financial institutions to follow the lead of BlackRock — whichTop tokenized funds of government securities. Source: Dune Analytics BlackRock’s move to launch a fund on Ethereum wasn’t without controversy, with the asset manager’s on-chain wallet quickly becoming the target of various spoofs from crypto enthusiasts.from the now OFAC-sanctioned mixer Tornado Cash, as well as a roster of various cryptocurrencies from real-world asset tokenization projects and memecoins. Despite the potential legal troubles that come with opting to tokenize assets on public blockchains — instead of using a more KYC and AML-friendly private network, Morin said many firms would likely take the lead from BlackRock.Morin also noted that Franklin Templeton had already made the “forward thinking” move to launch its tokenized money market fund on the Ethereum layer-2 network Polygon in October last year.Franklin Templeton’s 11-month-old Franklin OnChain U.S. Government Money Fund now boasts a total of $360.2 million in U.S. Treasurys. In total, $1.08 billion in U.S. Treasurys have now been tokenized across 17 products.Having previously worked with the legal team in the lead-up to Grayscale launching its Bitcoin ETF, Morin agreed with recent sentiment that the lack of communication between the United States Securities and Exchange Commission between prospective fund issuers was a bad sign.Eric Balchunas — Morin said the chances of an approval by VanEck’s deadline on May 23rd grew slimmer with each day the SEC refrained from engaging in public comment.
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