WisdomTree’s digital money market fund WTGXX can now be used for spending using the WisdomTree Prime Visa Debit Card. This is the vision many have had for tokenization – that instead of keeping money in bank accounts, investors can earn a yield on their assets until they are ready to spend. WisdomTree refers to it as “Earn-Until-You-Spend”.
Crypto investors have been doing this for years, but WisdomTree is the first traditional financial (TradFi) institution to make it possible with more conventional investments such as its digital money market fund. Currently WTGXX yields 4.6%. Of course, unlike a bank account, a money market fund doesn’t carry deposit insurance. Although it is backed by government bonds.
“Rolling out the capability to link our money market Digital Fund to our debit card gives users choice in how they put their money to work,” said Will Peck, Head of Digital Assets at WisdomTree.
“We all have a traditional checking account that generally isn’t doing us any favors. By connecting a yield-earning asset directly to our spending functionality, users can fund their daily purchases all within the app with the funding mechanism potentially earning yield every single day via a WTGXX investment until the investment is sold to facilitate spending.”
WisdomTree CEO Jonathan Steinberg has highlighted the importance of usability for tokenized assets for some time.
The WisdomTree Prime app supports other assets such as tokenized gold, although we don’t believe that users can spend that via the debit card quite yet. Users can also hold Bitcoin and Ethereum, which can be used for Visa purchases.
Spending via Visa involves a fund redemption and using Visa as an intermediary. Whether it’s viable for a cup of coffee depends on the fees. However, WisdomTree said there are no transaction fees for spending the MMF using the Visa card.
Update: added the confirmation regarding transaction fees
