Wall Street Titan Guggenheim Tokenizes $20M of Commercial Paper on Ethereum

Blockchain platform Zeconomy assisted the $300B asset manager with the transaction and reports "massive demand" for digital assets.

Financial services giant Guggenheim Partners has taken a step into the world of blockchain technology by tokenizing $20 million of commercial paper on the Ethereum blockchain.

The transaction was carried out by Guggenheim Treasury Services, a subsidiary of Guggenheim Partners, in collaboration with blockchain platform Zeconomy, which announced the news on Thursday.

A spokesperson for Guggenheim confirmed the transaction but declined to provide further comment.

The tokenized commercial paper was issued on the Ethereum blockchain with a P-1 credit rating from Moody's Investors Service. Commercial paper is a type of short-term, unsecured debt instrument typically issued by corporations for periods of less than a year, often as short as 30 days.

The move by Guggenheim comes on the heels of German industrial giant Siemens AG issuing digital commercial paper via megabank JPMorgan’s Onyx and blockchain platform SWIAT.

The tokenization of traditional financial instruments, often referred to as real-world assets (RWAs), has emerged as a burgeoning domain within the crypto industry, with TradFi firms increasingly venturing into this space.

According to research firm RWA.XYZ, the RWA market capitalization now stands at $12 billion, with tokenized U.S. government securities alone reaching $2 billion.

“With tens of billions of dollars locked in DeFi and corporate treasuries, we are thrilled to partner with GTS to address a clear need for more trusted and secure blockchain solutions,” said Giacinto Cosenza, CEO of Zeconomy, in a statement.

“As clearly demonstrated by the ETFs approval and the growth of the tokenization space, there is a massive demand for these digital assets, and we want to enable our partners so they can be at the forefront of what could be a transformative moment in the financial industry,” Cosenza added.

The commercial paper was issued by Guggenheim Treasury Services, a wholly owned subsidiary of Guggenheim Partners, which had assets under management of over $300 billion as of March 31.

While this marks a new venture into the crypto domain for Guggenheim, the firm has previously participated in the broader digital asset ecosystem.

The Macro Opportunities Funds of the investment firm were permitted to attain exposure of up to 10% to the former Grayscale Bitcoin Trust (GBTC), which earlier this year converted into one of the spot bitcoin (BTC) exchange-traded funds (ETFs).