Realize launches tokenized fund targeting US Treasury bills market

The fund is called Realize T-BILLS Fund, and it will buy BlackRock’s iShares and State Street’s SPDR, tokenise units from these ETFs, and incorporate them within the fund

Technology firm Realize, based in Abu Dhabi, has launched a new investment vehicle. This vehicle will purchase units of exchange-traded funds (ETFs) that focus on US Treasury bills and convert these assets into digital tokens. These tokens can then be held, traded, and transferred on a blockchain.

The fund is named Realize T-BILLS Fund and will purchase BlackRock’s iShares and State Street’s SPDR. It will then tokenize units from these ETFs and incorporate them within the fund, Dominik Schiener, co-founder of Realize, told Reuters in an interview. The fund hopes to grow to a $200 million fund.

According to data platform rwa.xyz, tokenized Treasuries are a rapidly expanding segment of the crypto market, with a market capitalization of $2.4 billion on public blockchains, primarily Ethereum.

They are essentially digital tokens that are created on a blockchain and backed by US government debt. These tokens are issued by both blockchain-native firms and traditional institutions, such as BlackRock and Franklin Templeton.

BlackRock launched its first tokenized fund, BUIDL, on the Ethereum blockchain in March. This fund invests 100 percent of its assets in cash, US Treasury bills, and repurchase agreements (repos). The BlackRock fund currently has a market capitalization of $530 million.

The Realize fund will be the first tokenized fund to be domiciled out of the Abu Dhabi Global Market and approved by its regulatory authority. It will issue the $RBILL token, which will serve as the digital representation of the units of the fund. These tokens will initially be launched on both IOTA and Ethereum blockchain networks.

Neovision Wealth Management, which is also based in the UAE, will manage the fund.

“The goal is to bring fungible assets on chain. T-Bills are the most liquid asset today in the real world,” said Schiener. “They’re also the best form of collateral, paying around 5 per cent.”

Dr. Ryan Lemand, co-founder and chief executive officer of Neovision, said it is more logical to purchase T-Bill ETFs and tokenize them rather than directly purchasing Treasury bills in the market. He explained that if they were to buy cash Treasuries in the market, there would be continuous transaction costs since they would need to be purchased repeatedly.