The approval of spot Ethereum ETFs by the US Securities and Exchange Commission (SEC) carries significant implications for firms engaged in tokenizing assets that trade on-chain.
The approval of spot Ethereum ETFs by the US Securities and Exchange Commission (SEC) carries significant implications for firms engaged in tokenizing assets that trade on-chain. Carlos Domingo, CEO of Securitize, affirmed Ethereum's regulatory status as a commodity and stated that the approval is bullish for the asset tokenization premise on the Ethereum blockchain.
Domingo highlighted the importance of institutional safety in using Ethereum, as the approval eliminates concerns about Ethereum's native token, ETH, being classified as a security. He emphasized that Ethereum is now considered safe for institutional use, further bolstering its position as a reliable platform for asset tokenization.
This is beneficial to protocols specializing in tokenizing real-world assets (RWAs), such as Ondo Finance. The project focuses on providing institutional-grade financial products and services, including tokens offering USD yield or exposure to US Treasuries. In 2022, Ondo Finance raised $20 million in a Series A funding round led by Pantera Capital and Peter Thiel's Founders Fund. Following the approval of spot Ethereum ETFs, ONDO experienced a significant surge in its governance token, ONDO, gaining 32.8% over the past week. It is currently trading at $1.23.
BlackRock CEO Larry Fink has long regarded tokenization as the next step from ETFS, envisioning reduced fees and instantaneous settlement facilitated by blockchain technology. BlackRock's strategic funding round of $47 million in tokenization firm Securitize further solidifies its commitment to the sector.
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