Bank of America (BAC) Sees tokenization, the creation of a virtual investment vehicle on blockchain linked to a tangible asset, as the next phase in the development of investment products describing it as “mutual fund 3.0,” Wall Street Bank said in a Friday report.
Like mutual funds first emerged in 1924 and stocked -traded funds (ETFS) Reformed investment in the 2000s could blockchain technology support a new generation of financial vehicles, wrote analysts led by Craig Siegenthaler.
Really active (RWA) Tokenization progresses quickly. The bank noted that companies like Securitize work with managers including Blackrock (Blk)Apollo, KKR and Hamilton Lane to issue tokenized funds. Asset Manager WisdomTree (Wt) built its own tokenization engine, giving it the opportunity to offer more than a dozen tokenized means.
According to data provider, RWA.xyz exceeds the value of the real words represented on the chain, $ 28 billion, largely in private credit and treasuries.
Regulation still remains a headwind. The genius and clarity actions address stableecoins, but leave many questions about tokenized funds unresolved. The bank still claims that the benefits of tokenization will drive adoption over time despite limited access for US investors today.
The case for tokenized shares is weaker because US brokers are already offering commission-free stock and stock exchange fund (ETF) Trade after Robinhood’s (HOOD) Disorder In 2019, the analysts wrote.
This shift pushed businesses against making money on client cash and order streams, making tokenized versions of these assets less convincing, the bank’s analysts said. But tokenized money market funds, driven by smart contracts, could increase these cash sweeping economy and open new revenue models.
Distribution is still the bottleneck. Platforms that offer tokenized funds remain rare, though online brokers like Robinhood, Public and Etoro (Etor) is well placed in view of their cryptic businesses and younger, self -sufficiency -oriented client bases. Coinbase (COIN) Can also arise as a partner when expanded beyond pure crypto, the report added.
Bank of America expects tokenized money market funds to lead adoption thanks to their attractive dividends compared to stablecoins, which cannot pay interest under the Genius Act, with private credit and high dividends that are likely to follow.
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