Libeara is collaborating with FundBridge Capital to launch a tokenized Wellington fund. In this partnership, Wellington will serve as the sub-manager for the Delta Wellington Ultra Short Treasury On-Chain Fund (referred to as the “ULTRA Fund”).
Founded by Standard Chartered’s SC Ventures, Singapore-based Libeara is a startup focused on the tokenization of real-world assets (RWA). The ULTRA Fund will initially be available on the Ethereum blockchain, with plans to expand to Arbitrum, Avalanche, and Solana in the future. Standard Chartered will act as the custodian for the fund.
In January Moody’s issued a rating for the SGD Delta fund issued on the Stellar and Ethereum blockchains, one of the first ratings for a tokenized fund on a public blockchain. The SGD Delta fund was also issued by FundBridge Capital and tokenized by Libeara. The Delta part of the fund refers to Libeara’s Delta tokenization platform that is used to manage issuance, redemption and transfers.
“This new fund, modelled after the SGD Delta Fund — which became the first tokenised fund to receive a rating of Aa from Moody’s — brings the same level of institutional credibility to USD-denominated investments,” said Aaron Gwak, Founder and CEO of Libeara.
Tokenization provides several benefits, including efficiencies and mobility. The latter refers to the ease of transfer with almost instant settlement. This is particularly useful if funds are used as collateral, which some stablecoins are doing. Mountain Protocol, the issuer of the yield bearing USDM stablecoin (market cap $48m), plans to invest in the ULTRA Fund. Libeara is also partnering with Ondo Finance to use its intra day redemption mechanism.
“We believe this fund and the tight relations with sponsoring entities allow for great operational efficiency and are a step forward in further institutionalizing crypto,” said Martin Carrica, CEO and Co-Founder at Mountain Protocol.
Tokenized money market funds
The ULTRA Fund joins a list of tokenized money market funds associated with traditional financial (TradFi) institutions. The largest is BlackRock’s BUIDL (AUM $533m), followed by Franklin Templeton’s FOBXX (AUM $435m). A large chunk of BUIDL, around $184 million, is held by Ondo Finance as collateral for its own tokenized Treasury offering.
Meanwhile, Hashnote is affiliated with DRW and DRW’s Cumberland and is the issuer of USYC (AUM $375m). But not all TradFi asset managers have attracted hundreds of millions in assets. WisdomTree’s largest digital money market fund has less than $12 million in assets under management. On the other hand, Wellington with $1.4 trillion in AUM, is closer to Franklin Templeton in size.
A differentiating factor for the ULTRA fund is its Singapore location. Some of the tokenized money market fund offerings are incorporated offshore, including BlackRock’s BUIDL, which has a high minimum investment of $5 million. Franklin Templeton’s FOBXX is mainly targeted at U.S. clients, although it’s planning an international offering out of Luxembourg.
“By leveraging blockchain technology, FundBridge can deliver enhanced access and operational efficiencies to clients, aligning with Wellington’s commitment to providing innovative, best-in-class investment solutions,” said Mark Garabedian, Director of Digital Assets and Tokenization for Wellington Management.
Libeara also recently took part in Hong Kong’s Project Ensemble trials for tokenized deposits and wholesale CBDC. Its role was to tokenize credit bill negotiation as part of a supply chain finance use case.
