Yasuda on Tokenization

The tokenization trend is seen as potentially disruptive to the ETF industry, with some experts predicting that mutual funds may eventually bypass ETFs and convert directly into tokenized structures. This shift could leverage the $170 billion stablecoin market and offer investors benefits such as instant settlement and the ability to use fund tokens as collateral in blockchain transactions. As major asset managers continue to explore tokenization, the industry anticipates a move towards mass adoption of this technology, potentially reshaping the future of financial services delivery.

This MMF is different from other tokenized MMFs in that all the underlying assets are onchain whereas others' underlying investments are off-chain

The transition to T+1 settlement in the US has been more challenging than anticipated for asset managers, with 46% of firms facing significant funding gaps due to misalignment with the EU and UK's T+2 systems. This disparity has led to increased trading costs and potentially lower returns for European investors, prompting the EU to consider its own move to T+1 by 2027. The difficulties experienced in this transition highlight the complex challenges faced by the global financial industry in harmonizing settlement cycles across jurisdictions.

In light of these challenges, the tokenization of financial assets offers a promising solution with its potential for T+0 settlement. This could eliminate funding gaps, reduce cross-border complications, and potentially lower costs for investors. Tokenized assets settling at T+0 could provide asset managers with a competitive edge and improve market liquidity by freeing up capital faster. However, the transition to such a system would require significant regulatory, technological, and operational changes across the financial industry. While tokenization presents an opportunity to solve many of the issues currently faced with misaligned settlement cycles, the experience with the T+1 transition serves as a valuable lesson in the need for careful planning and execution in any future shift towards faster settlement systems.

ParaFi Capital tokenized a portion of its venture fund on the Avalanche blockchain using Securitize's platform.

ParaFi's founder, Ben Forman, believes that tokenizing private market strategies can streamline settlement processes, reduce costs, and potentially unlock benefits such as increased liquidity and programmability. 

In a landmark decision, the High Court of Justice for England and Wales has ruled that Tether's USDT stablecoin can be classified as property under English law. Deputy High Court Judge Richard Farnhill declared that USDT attracts property rights, can be subject to tracing, and can constitute trust property, positioning it as a distinct form of property that is neither a "thing in possession" nor a "thing in action".

This ruling, made on September 12, 2024, aligns with recent legislative efforts in the UK to classify digital assets as personal property. It marks the first time a UK court has classified cryptocurrencies as property following a full trial, setting a significant legal precedent. The decision could have far-reaching implications for cryptocurrency regulation, investor protection, and the treatment of digital assets in legal and financial contexts within the United Kingdom.