🤝 Security Token Prime Insights: 4/29/2024

Exclusive Intelligence for Security Token Prime Members

April 29, 2024

Summary and Key Takeaways

1. USDC Overtakes Tether in Stablecoin Volume

Tether still maintains its status as the largest stablecoin in the world and the 3rd largest cryptocurrency in the world, over 3x bigger than USDC. Despite this, Circle (and with Coinbase’s help) has established itself as the most used digital currency in the world. USDC saw 166.6 million transactions in April 2024, overtaking USDT’s 163.6 million. As we continue to see USDC be the stablecoin of choice for the regulated RWA industry, we’ll have to keep our eye on Tether as they also get into tokenization. And let’s not forget about JPM Coin either. 

2. Peer-to-Peer BENJIs are Here

Franklin Templeton’s leading the market in liquidity funds size. Liquidity Funds are the new hot trend in tokenization. We’re referring to money market funds, yield-bearing stablecoins, treasuries products, and the like. Franklin Templeton is the industry’s first tokenized money market fund issuer, launching the Franklin OnChain US Government Money Fund (FOBXX) in April 2021. The fund recently surpassed $380 million in assets under management as the pressure is on with BlackRock in the playing field now. 

What distinguishes BENJI from the rest is that it isn’t merely a fund designed for large investors and institutions - which are all mostly private funds. BENJI is a 1940 act registered fund meaning anyone can buy it in the US. Going peer-to-peer is merely part of their strategy to continue adoption and usage on multiple different blockchains, which each all have their own ecosystems, communities, and applications. Transfers are currently limited to whitelisted investors on its investment app, Benji Investments. The fund can now act as both an investment vehicle and payments vehicle, strengthening its pitch as other corporations and small businesses onboard and begin accepting payments in the form of BENJI token, much like WisdomTree has been looking to solve through its WisdomTree Prime application.

3. BlackRock Finds Its Way to Hedera Through Archax

Similar to Ondo, where there also was no direct BlackRock involvement, Archax has tokenized a BlackRock Money Market Fund and continued to use Hedera Hashgraph as their select chain of choice from past work with abrdn. The trend is clear, the market wants and needs liquidity products in order to grow - each platform needs its golden goose liquidity fund to onboard capital with. We expect we’ll see many similar examples across numerous chains, jurisdictions, and marketplaces for this reasoning. Once again, the use of BlackRock has brought a lot of attention to this transaction, which was conducted on Ownera’s FinP2P platform. The associated HBAR crypto token saw a nice spike from RWA adoption headlines like this - a good sign of positive crypto sentiment that has now morphed into a booster activity. AKA it's now hot to be involved in TradFi tokenization and chains and their foundations are going all in to support it.

4. Is There Anyone Even Left for the SEC to Go After in Crypto?

We knew Coinbase was always going to go head-to-head with the SEC. We accurately predicted Uniswap would become a target. Now, they’ve boldly gone after Metamask and by proxy, its owner Consensys. The massive war chests these companies have are being put to immediate use with multiple lawsuits as a counter attack, as well as another one by an industry association on the dealer definition. It seems like Gary Gensler is going all in regardless of the election outcome, the steps have been put in motion (Wells Notices served) and there is still time for the SEC to go after more firms under his leadership. Are we going to see lending protocols or, perhaps, stablecoins next?

Notable Market Headlines

Institutional Activity

STM Data

This week the Security Token Market data team would like to highlight activity on the liquidity fund side. While BUIDL saw an overall increase in AUM to $349M via over $50M in inflows/ outflows, BENJI experienced a decrease to $376M thanks to over $18M in inflows/ outflows.

This could be the week BUIDL overtakes BENJI in AUM and the STM team will be keeping a close eye. For more insights, please visit STM Charts on STM.Co!

Security Token Prime is Made Possible Thanks to Our Enterprise Partners

Upcoming Events

  • Weekly Industry Updates Breakdown - Tuesday April 30th at 3:30pm EST

  • Blockchain Meets Construction with Inveniam and LV8R Labs - Wednesday May 1st at 11am EST

  • Office Hours with Security Token Prime - Thursday May 2nd at 11am EST

  • Weekly Networking Happy Hour - Thursday May 2nd at 4:30pm EST

Recent Recordings

  • NEW: Non-Performing Loans with BlockInvest and Davis & Morgan (Recording Link)

  • Issuer Spotlight: Tuscany National Token (Recording Link)

  • Platform Spotlight: Block Time Financial (Recording Link)

  • The TradFi/DeFi Hybrid with Maple, Centrifuge and Swarm (Recording Link)

  • Platform Spotlight: REtokens' New Platform with Tyler Vinson and David Kirschbaum (Recording Link)

  • Powers Hour: New SEC “Dealer” Rule Expansion and DeFi Impacts (Recording Link)

Hello members,

Next week is the week, it's TokenizeThis time! The CEOs of Securitize, RealT, Provenance, Oasis Pro, Rialto, Red Swan, Maple, Propy, Inveniam, Hashnote, Texture Capital, BlockInvest, DwellFi, L1, Orderbook, RAZE, InvestReady alongside Digital Asset team members from JPMorgan, Franklin Templeton, WisdomTree, Northern Trust, DTCC, Broadridge, with the heads of tokenization from Coinbase, Ripple, Avalanche, Solana, Stellar, Chainlink, topped off with industry executives from tZERO, INX, Republic, Neoclassic Capital, Zerohash, and a cherry on top with a former SEC Commissioner and former SEC Enforcement Chief are all coming to Miami for the go-to Tokenization and RWA conference of the year. 

So what are you waiting for? Come join us next week on May 9th and 10th. Summit.STM.co use PRIME for 50% off at checkout.

Happy tokenizing,
Herwig
CEO, Security Token Group 
@tokenwig

Helpful Resources

We hope you enjoyed this week's Security Token Prime Insights email - if you have any feedback on either what you liked or what you’d like to see, please reply to this email with it.

This newsletter should be not be considered financial advice.
Security Token Prime Insights is for informational purposes only.