Crypto: Wisdomtree Gets Sec Approval For Round-the-clock Trading Of...

The approval allows WisdomTree’s tokenized Treasury money market fund to trade and settle around the clock within the US regulatory framework.

US-based asset manager WisdomTree has launched 24/7 trading and instant settlement for the WisdomTree Treasury Money Market Digital Fund (WTGXX), enabling round-the-clock secondary trading of a registered tokenized mutual fund within the US regulatory framework.

The company said it is the first time a registered tokenized mutual fund has been allowed to trade and settle around the clock under the Investment Company Act of 1940 using a dealer-principal model. The structure allows shares to settle instantly, giving investors real-time access to yield-bearing US Treasurys exposure.

To implement the model, WisdomTree entities obtained exemptive relief from the US Securities and Exchange Commission (SEC). Its affiliated broker-dealer, WisdomTree Securities, also received approval from the Financial Industry Regulatory Authority (FINRA), which oversees US broker-dealers, to conduct principal trading in the fund’s shares.

Liquidity will be provided through broker-dealer inventory rather than an exchange, with execution subject to the broker’s balance sheet capacity while the fund’s primary issuance and redemption process remains unchanged.

The functionality will initially be available to institutional users through WisdomTree Connect, with USDC (USDC) serving as the settlement asset for 24/7 transactions. WisdomTree also introduced continuous dividend accrual, allocating daily income based on how long tokens are held in verified wallets, including during intraday transfers.

WTGXX invests in short-term US Treasurys and seeks to maintain a $1 net asset value, though it is not insured nor guaranteed by any government agency.

Related: Franklin Templeton, Binance allow tokenized MMFs as off-exchange collateral

A money market fund pools cash into short-term, high-quality debt to preserve capital while generating modest yield. In recent years, asset managers have begun issuing tokenized versions that record fund shares on blockchain networks, bringing traditional cash products onchain.

The sector has expanded rapidly. On Nov. 26, the Bank for International Settlements described tokenized money market funds as an emerging onchain yield product, estimating that assets had climbed to nearly $9 billion from roughly $770 million at the end of 2023.

Source: CoinTelegraph