DeFi protocol Ondo Finance and venture firm Pantera Capital plan to ramp up investments in real-world assets (RWAs), highlighting the industry’s increasing focus on tokenization amid favorable regulatory developments in the United States.
Both companies informed Axios that they plan to invest $250 million in RWAs through a new fund called Ondo Catalyst. Ondo’s chief strategy officer, Ian De Bode, says the funds will be invested to acquire equity stakes and tokens in emerging projects.
“We are seeing a bit of an arms race right now” in the tokenization market, De Bode told Axios, referring to the surge of companies entering the space. Exchanges in particular are zeroing in on tokenized stocks and exchange-traded fund (ETF) offerings.
As Cointelegraph recently reported, digital brokerage firm Robinhood has launched a new layer-2 blockchain to enable European clients to trade tokenized US stocks and ETFs.
In May, Kraken announced plans to offer tokenized US stock trading to investors outside the United States.
Meanwhile, crypto exchange Coinbase is reportedly pursuing regulatory approval to offer tokenized equities, a move that would help it compete with Robinhood and other trading platforms.
Ondo Finance has been ramping up its push into onchain finance, recently announcing the formation of a Global Markets Alliance with several crypto firms to drive adoption of blockchain-based capital markets. On Thursday, the company announced that OKX Wallet has joined the alliance.
Earlier this year, the company launched Ondo Global Markets to bring traditional financial markets onto the blockchain.
Notably, Ondo is backed by Peter Thiel’s Founders Fund, which is reportedly supporting efforts to build a new crypto-friendly bank.
Related: Chainlink, JPMorgan, Ondo Finance complete crosschain treasury settlement
The tokenized RWA market is gaining momentum
Efforts to build a new tokenized economy are being supported at multiple levels across industry and government, with US Securities and Exchange Commission (SEC) Chair Paul Atkins pledging to create pathways for tokenization innovation.
Following a regulatory era marked by “regulation through enforcement,” Atkins’ SEC is now focused on “how do we advance innovation in the marketplace,” he told CNBC earlier this week.
A recent industry report co-authored by RedStone, Gauntlet and RWA.xyz found that the tokenized RWA market has grown by as much as 380% since 2022, reaching $24 billion as of June. Notably, this figure excludes stablecoins, which are collectively valued at more than $250 billion.
The RedStone report found that private credit and US government debt are the main growth drivers for RWAs.
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