Guggenheim Treasury Services and Zeconomy Partner to Issue $20 Million of Tokenized Commercial Paper on Ethereum Blockchain
The partnership between Guggenheim Treasury Services, a subsidiary of financial services giant Guggenheim Partners, and blockchain platform Zeconomy has resulted in the issuance of $20 million of tokenized commercial paper on the Ethereum blockchain. This move marks another significant step towards the mainstream adoption of digital assets and highlights the growing demand for tokenization of traditional financial instruments.
Giacinto Cosenza, CEO of Zeconomy, Sees "Massive Demand" for Digital Assets
In a statement, Giacinto Cosenza, CEO of Zeconomy, expressed his enthusiasm for the partnership with Guggenheim Treasury Services. He noted that the success of crypto ETFs demonstrates the massive demand for digital assets and emphasized the need for trusted and secure blockchain solutions to meet this demand. "With tens of billions of dollars locked in DeFi and corporate treasuries, we are thrilled to partner with GTS to address a clear need for more trusted and secure blockchain solutions," Cosenza said.
Tokenization of Traditional Financial Instruments: A Growing Market
The tokenization of traditional financial instruments, referred to as real-world assets (RWA), has become one of the hottest areas in crypto for TradFi firms to dabble in lately. The market capitalization of RWA has grown to $12 billion, including $2 billion of tokenized U.S. government securities, according to research firm RWA.XYZ. This trend is a clear indication that traditional financial institutions are increasingly recognizing the potential benefits of digital assets and blockchain technology.
Guggenheim Treasury Services’ Participation in the Crypto Ecosystem
While this partnership marks a new direction for Guggenheim Treasury Services, which boasts a whopping $300 billion in assets under management (AUM), the global investment firm has previously participated in the crypto ecosystem. The firm’s Macro Opportunities Funds has been authorized to take on up to 10% exposure to the former Grayscale Bitcoin Trust (GBTC), which in January converted into one of the spot bitcoin (BTC) exchange-traded funds (ETF). This history of involvement demonstrates Guggenheim’s commitment to exploring the potential of digital assets and blockchain technology.
Commercial Paper Rated P-1 by Moody’s Investors Service
The commercial paper issued by Guggenheim Treasury Services was rated P-1, the highest credit rating available for such instruments, by Moody’s Investors Service. Commercial paper is short-term (less than a year, usually 30 days), unsecured debt issued by corporations. This high rating reflects the trustworthiness and creditworthiness of Guggenheim Treasury Services and further underscores the potential benefits of tokenization.
Conclusion
The partnership between Guggenheim Treasury Services and Zeconomy marks an important milestone in the adoption of digital assets and blockchain technology by traditional financial institutions. The issuance of $20 million of tokenized commercial paper on the Ethereum blockchain demonstrates the growing demand for trusted and secure blockchain solutions and highlights the potential benefits of tokenization. As the market continues to evolve, it will be interesting to see how Guggenheim Treasury Services and other traditional financial institutions continue to explore the potential of digital assets and blockchain technology.