DigiFT, a Singapore-based fintech company, has made a foray into the digital asset realm with the launch of the its US Treasury bill depository receipt (DR) tokens. 

The DR tokens offer investors fractional ownership in the underlying US Treasury bills, enabling investors to gain exposure to the traditionally secure US debt market without the need for substantial upfront capital, the firm said in a Monday press release. 

Traditionally, investing in US Treasury bills has required significant financial resources. 

DigiFT’s DR tokens aim to dismantle this barrier by allowing investors to purchase fractional shares of these bills. 

“DigiFT’s innovative DR structure addresses a pain point in the current RWA market, empowering investors with direct ownership of underlying assets and returns,” Henry Zhang, the founder and CEO of DigiFT, said. 

He further emphasized DigiFT’s commitment to expanding the range of traditional financial assets in the Web3 space through the DR model, which offers enhanced investor protection and transparency.

DigiFT Says its DR Tokens Are Regulated

One key aspect emphasized by DigiFT is compliance with regulations, providing investors with peace of mind, the company said. 

Traditional asset ownership often involves navigating complex legal and regulatory frameworks. 

By adhering to regulations, DigiFT aims to streamline the investment process and make it more accessible for investors. 

The company detailed that the DigiFT US Treasury Tokens (DRUST) is the first offering of a series, under the DR structure. 

“Each DRUST is directly backed by AA+ rated, highly liquid and short-term U.S. Treasury Bills, tailor-made for stablecoin issuers and Web3 product developer / managers seeking regulatory compliant treasury as well as cash management solutions.”

Institutional and accredited investors can access DRUST from their authorised self-custodial wallets using fiat or stablecoins anytime anywhere. 

Established in 2021 and previously a participant in the Monetary Authority of Singapore’s FinTech Regulatory Sandbox, DigiFT obtained the Capital Markets Services (CMS) license and recognition as a Recognized Market Operator (RMO) in December 2023. 

Tokenized Funds Continue to Gain Popularity

In a report earlier this year, Moody’s, a leading investment risk assessment firm, revealed the value of tokenized funds surged from $100 million at the beginning of 2023 to approximately $800 million, driven by the rising tokenization of U.S. treasuries.

The report highlighted that both public and private blockchains are witnessing the inclusion of various assets.

Some of the more notable examples include Franklin Templeton’s U.S. Government Money Fund expanding from Stellar to Polygon, Backed Finance launching a tokenized short-term U.S. treasury bond exchange-traded fund (ETF), and UBS Asset Management deploying a tokenized money market fund (MMF) on the Ethereum blockchain.

According to Moody’s, the tokenization of MMFs offers the potential to combine their stability with the technological advantages of stablecoins.

Additionally, the applications of tokenized MMFs extend beyond simple purchasing and holding until maturity, indicating the potential for a wider range of uses.

The report also suggested that tokenized funds can enhance market liquidity and accessibility, reduce costs, enable fractionalization, decrease dependence on intermediaries, shorten settlement times, automate processes through smart contracts, and enhance transparency.

RWA & Tokenization: Moody’s highlighted the growing adoption of blockchain-based tokenized funds, stating that it improves the efficiency of investing in assets like government bonds, funds and represents untapped market potential.

These are one of many reasons why RWA should be… pic.twitter.com/v9FueHXeFd

— The Real Lifestyle (@Trl_co) January 16, 2024

 

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