Asset Management Company WisdomTree Considers Developing USD-based Stablecoin

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by Bhushan Akolkar · 3 min read
Asset Management Company WisdomTree Considers Developing USD-based Stablecoin
Photo: WisdomTree / Twitter

Having specialized its services in the ETF markets for years, financial giant WisdomTree is looking to explore the digital currency space by introducing a new stablecoin. The company wants to test faster mobility of funds using the blockchain technology.

As per the latest developments, U.S.-based financial asset manager WisdomTree plans to release a regulated stablecoin in the market. As reported by FNLondon, this stablecoin will be tied to three different assets – fiat currency, gold, and government debts.

Furthermore, the so-called stablecoin will have its value closely linked to the U.S. dollar. The publication reports that this move from WisdomTree comes as the asset manager plans to take-on financial giants like Fidelity Investments and BlackRock in the digital currency space.

The New York-based asset manager specialized in exchange-traded-funds (ETFs). Besides, it oversees nearly $63 billion worth of assets globally. WisdomTree’s corporate-strategy director William Peck said that this move is a natural extension to its ETF business. He further explained that ETF trade just like stocks, however, they allow investors to put their money in several traditional financial assets.

Regulated Stablecoin Will Have Similar Structure to ETF

Peck also mentioned that the regulated stablecoin will have a similar structure to that of an ETF. However, this will be more appealing to cryptocurrency traders as it will ensure the easy mobility of funds over blockchain-powered networks. He further added:

“We absolutely see a market within the existing crypto-native community, transacting digital assets today. Longer-term, this is positioning us to be a leader.”

WisdomTree has already indicated its intentions to foray in the stablecoin market last week. The financial giant was a leading investor for the startup firm Securrency. This startup specializes in designing tools that can assure regulatory compliance for blockchain systems.

Furthermore, in 2019, WisdomTree also launched a product on the Swiss Stock Exchange providing investors exposure to Bitcoin. It will be interesting to see SEC‘s stand on this initiative from WisdomTree. The regulator has been very strict on the issuance of stablecoins by private companies. It has also had a strict policy when it comes to dealing with Facebook‘s Libra project.

However, the good thing is the entry of more private players will force the SEC to take concrete measures in this direction. WisdomTree is yet to file a formal proposal with the securities regulator for digital assets.

WisdomTree’s market competitor Fidelity Investments is also aggressively working on different cryptocurrency products, especially for the institutional players.

“There’s a belief among some that blockchain-based infrastructure is going to be more and more critical in financial services going forward. We feel like this kind of step is a way in which WisdomTree can be involved if the world evolves in that way,” said Peck speaking on blockchain’s importance in financial services.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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