Major French custody bank CACEIS is enabling access to UCITS natively digital money market funds (MMFs). The bank is also the custodian of the same Spiko branded MMFs. In June, Spiko gained approval from the French Financial Markets Authority (AFME) to launch tokenized US and Euro Treasuries on the Ethereum and Polygon blockchains. Looking at the transactions, it’s getting traction.
This also marks the launch of CACEIS’ new digital asset custody architecture. CACEIS, has over €8 trillion in assets under custody and administration. It is a subsidiary of Credit Agricole, with Santander owning almost 30%. In May it announced the creation of a dedicated Digital Assets business line and previously partnered with technology firm Taurus for custody and tokenization. It also recently landed a Spanish license as a digital asset service provider (DASP), adding to the French license it received last year.
Natively digital money market funds showing traction
While Spiko’s US Treasury fund has a market capitalization of $39 million across the two blockchains, the Euro denominated one is bigger, at €58 million ($64m). The funds are available to retail investors and have a minimum investment of €1,000 or $1,000 with SME businesses as a key target market. Twenty First Capital is the asset manager and PwC is the auditor.
Looking at the euro MMF on the Polygon blockchain, it exhibits a high volume of transactions, like one would expect from a traditional money market fund. In other words, people regularly move cash in and out of the fund. Spiko CEO Paul-Adrien Hyppolite confirmed to Ledger Insights that its primarily European client base is not interested in bearing the Ethereum transaction fees.
By contrast, most on-chain US Treasury funds hold cash for the crypto crowd, with the holdings relatively static.
For example, the $38 million in the Spiko US Treasury MMF on Ethereum has 11 holders and 21 transfers since June. The €54 million Euro MMF on Polygon has 304 holders and 1,423 transactions during the same time frame.
Spiko supports subscription and redemption using stablecoins, which is more heavily used for the US fund. Most Euro investors use SEPA, although some have used EURe.
“These first transactions validate CACEIS’ choice of technology architecture and the robustness of our digital asset custody service,” said Laurent Majchrzak, Group Head of Digital Assets at CACEIS. “Clients are now able to invest in digital assets with the same level of security and reliability as enjoyed by traditional assets. We are doing everything we can to support clients during the initial stages of working with the blockchain.”
CACEIS is only providing access to clients via Ethereum, given that’s what its clients requested.
Meanwhile, it’s not surprising France would be a leader in tokenized funds. It is host to one of the first DLT-based fund distribution networks, IZNES, which was founded in 2017.
Update: added confirmation that CACEIS client access to the digital funds is on the Ethereum blockchain. And the comment regarding European clients being less willing to pay Ethereum transaction fees, and use of stablecoins.
