Coinbase Asset Management Plans Tokenized Money Market Fund

Several names from the asset management arm of US-listed cryptocurrency exchange Coinbase (COIN) have announced that they will be launching a tokenized money market fund, venturing into one of the most popular crypto-backed areas of finance.

Tokenization, which refers to representing ownership of real-world assets (RWAs) through blockchain-based products, has become one of the biggest trends in crypto recently. BlackRock, the world’s largest asset manager, introduced a fund called BUIDL a few months ago that holds U.S. Treasury bonds. The fund quickly grew to $500 million in assets after launching in March.

Tokenized funds offer a number of potential benefits for investors, including the transparency and potential for greater liquidity offered by blockchain-linked assets. There are also efficiency gains for issuers.

For Coinbase Asset Management in particular, this would represent a significant step in the company’s attempt to enter the already well-known tokenization space. In December, the company received in-principle approval from an Abu Dhabi regulator to begin tokenizing traditional assets on Base, the exchange’s Ethereum scaling network.

Coinbase Asset Management is working with Bermuda-based Apex Group to help facilitate the tokenized fund, two people familiar with the matter said. Apex provides services for more than $3 trillion in assets through custody, management, deposits and managed funds.

In March 2023, Coinbase acquired One River Digital Asset Management and Coinbase Asset Management was formed.