Tokenization of real world assets is taking a major leap toward mainstream adoption. Now, global asset manager WisdomTree is teaming up with fintech giant MoonPay to make its tokenized Treasury money market fund widely accessible to everyday U.S. investors.
Now, the partnership with MoonPay taps into its massive network of over 35 million accounts to create a seamless access point for tokenized funds, while MoonPay will also use the WisdomTree fund to manage its own stablecoin reserves. Joining us now here at the New York Stock Exchange to discuss this collaboration and the bridge between banking and blockchain is Caroline Pham, CEO of MoonPay Institutional.
Caroline, great to have you back. Thank you so much for joining me.
Thank you so much for having me. It's great to be here.
Well, I'm so glad you're here on the heels of this announcement. So tell us about the partnership.
So this is very exciting. It's something that we've been working on since the beginning of the year, when I got to MoonPay and I realized that MoonPay was essentially a distribution machine: 35 million users, 180 countries, payments and settlements in 120 fiat currencies.
I realized that with the adoption of tokenization from an institutional perspective, now we are finally bringing regulated, safe investment products like money market funds on chain.
And so if you're a retail user and you're going into your wallet app and you're looking at it and you're saying, gosh, you know, I want something that's going to pay me an investment return, you know, something that I'm going to be able to put my money to work while it's just resting there, I can earn a return.
Why not have them have these safe, SEC regulated products? And so I think by again, taking MoonPay's on chain capabilities, our technology infrastructure platform, and asset managers like WisdomTree, tremendous innovators in this space, particularly with tokenization, that just was like a marriage made in heaven.
Yeah. And speaking of which, I understand MoonPay is also using this fund to back its own stablecoin reserves. So tell us about the advantage of that. Why holding reserves on chain is better than traditional bank rails?
Sure. Of course. So again, when you look at the GENIUS Act, the GENIUS Act created very clear standards for what you needed to have to invest your stablecoin reserves in.
And again, money market funds that hold U.S. Treasuries are among the safest regulated products that we have today and out there. And when you have it on chain, you're able to do things like real time rebalancing. You're able to bring down the costs of subscribing and redeeming into these money market funds.
And so again, all the efficiencies around being on chain are realized. You know, GFMA and BCG put together a capital markets tokenization report. I think last year, something that I had looked at when I was CFTC acting chairman, and it estimated, I think, about $40 billion of OpEx savings across the banking industry and the financial services industry by going on chain.
That's a tremendous savings that can be redeployed for lending, to provide credit, to do financing. All of these things power the economy. And so that's really what the promise of blockchain technology is.
I mean, over a decade ago, one of the largest banks and the regulators and the central banks and asset managers looked at blockchain technology. They realized the modernization of the financial system was the true promise.
Yeah. And you spoke about your prior role at the CFTC. So you are so familiar with what happens with compliance, in particular some of the frictions. So do you think packaging a fully regulated 40 Act fund on chain finally gives institutions what they need?
Yes. I think now that we have the regulators being able to move forward with rulemaking activities, you're talking about really looking at SEC regulation and looking where, you know, you want to be able to say, oh, I can use blockchain technology for clearing and settlements. I can use blockchain technology as my books and records.
So now you need to do the technical amendments to the rules to enable the use of blockchain technology. The SEC has already made tremendous progress on this starting, you know, last year with Project Crypto continuing through this year.
So I expect to see a lot of things coming from the SEC that are going to enable more products to be brought on chain to reduce some of those frictions, but still maintain strict compliance requirements, recordkeeping requirements and investor protections.
It's all there and it's automated.
And finally, Caroline, while I have you here, when it comes to the latest announcement, this WisdomTree partnership, can you tell us how this is the first step in a global push? Tell me what we can expect as you plan to scale, not just here in the U.S., but also overseas, and also specifically what asset class might be next when it comes to tokenization?
Sure. Of course. So MoonPay Institutional is a blockchain infrastructure platform. So this is where we white label our on chain technology and capabilities to banks, asset managers, trading firms and exchanges.
So as all of these incumbents look at tokenizing existing financial instruments, their existing products and services, all the work that I did when I was at Citi, that's where MoonPay is a vendor that can provide this blockchain in a box solution.
So we are global. We have this global footprint. We are regulated in various jurisdictions around the world. And so as we look at the demand for tokenized investment products in the UK, in the EU, so moving beyond the U.S., I think those are some of the areas where we're going to be looking, and we've been establishing a presence in Asia as well.
Well, Caroline, great to have you here at the New York Stock Exchange. Appreciate your time. And thank you so much for joining us on the heels of this announcement.
Thank you for having me. My pleasure.
