01 May

Through a collaboration with Arca Labs, Anchorage Digital is now custodial shares of a tokenized Treasury fund, with the goal of promoting institutional participation in the market.

According to Anchorage CEO Nathan McCauley, Blockworks, the tokenization of physical assets will be a "defining trend" for institutional crypto in 2024. This is why there is a connection.

In 2021, the innovation division of cryptocurrency investment company Arca released shares of its US Treasury Fund as ArCoin, or digital asset securities. ArCoin, according to the startup, may save expenses and increase transparency in enterprise operations by taking the position of US Treasurys.

The US Office of the Comptroller of the Currency (OCC)-chartered bank with a focus on cryptocurrency, Anchorage, has now been chosen by the company to custody the shares.

Through the partnership, Anchorage customers can retain ArCoin at the bank. The tokenized shares are now accessible to institutions through the Anchorage platform, just like the hundreds of assets the company maintains are.

The term "qualified custodian," which was included in the regulator's February 2023 plan that would "entrust safekeeping of client assets" to such firms, has been attributed to Anchorage by McCauley.

According to a statement from Arca Labs president Jerald David, "companies are seeking the most secure and seamless digital assets solutions that meet US regulatory standards now that institutions have validated the benefits of blockchain technology."

Through the use of hardware security modules, the Anchorage platform maintains asset accessibility while keeping it offline in separate on-chain vaults. According to McCauley, the model acts as a "major unlock" for institutional tokenization participation.

The practice of tokenizing assets, such as funds or real estate, has gained attention recently as major fintech firms and established participants in the financial industry continue to explore blockchain-related projects.

The USD Institutional Digital Liquidity Fund, the company's first tokenized offering, was introduced in March by BlackRock, the largest asset manager in the world.

The OnChain US Government Money Fund, launched by fellow fund giant Franklin Templeton in 2021, began enabling institutional investors to transfer fund shares to other shareholders last week through the use of BENJI tokens.

Head of digital assets at Franklin Templeton Roger Bayston earlier told Blockworks that BENJI functions fundamentally as a stablecoin and makes money at the same time.

"Going forward, we intend to further enhance institutional involvement in the ecosystem by broadening our custody support for tokenization projects," McCauley stated.

May 2024, Cryptoniteuae

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