Tokenization is gaining momentum in the financial world; more and more financial institutions recognize the impact it will have on how financial products are created, traded, and managed. It is estimated that the potential value of tokenized assets will reach about $16 trillion by 2030. As tokenization gains traction in capital markets and regulated, on-chain money becomes increasingly prevalent, the potential for tokenized securities to generate significant value for investors and reshape the future of finance is undeniable. 

In 2024, we added the Tokeny ‘T-REX’ smart contract suite to enhance our marketplace of smart contracts on the Fireblocks platform. This integration with Tokeny offers clients the ability to securely deploy ERC-3643 tokens, directly from their Fireblocks workspace, with the Tokenization Engine and allows issuers to perform token operations on the deployed tokens through the Fireblocks Console, two functions that were previously limited to the Tokeny “Factory” and “Servicing” modules for issuers or agents. This does not impact how investors utilize Tokeny services: investors are still able to access the “Onboard,” “Investor Portal,” and “Billboard” modules through the T-REX Platform, but investors who use Fireblocks can rest assured that all transactions can be signed securely via Fireblocks. 

To adhere to regulations, securities issuers must enforce compliance at the token level. Those tokens can only be accessed by eligible investors, and they can only be transferred under pre-defined transfer conditions. Additionally, issuers, and their regulated agents, must retain some control over tokens, allowing them to freeze transactions or recover tokens in cases of suspicious activity or token loss. Fireblocks is a member of the ERC3643 Association, and the ERC-3643 token standard enables issuers to achieve that through identity-based permissioned tokens and advanced functions such as freeze, pause, and recover tokens. 

The integration allows issuers to issue, manage, and distribute ERC-3643 tokens seamlessly while having access to a complete ecosystem for providing end-to-end lifecycle management of tokenized securities. The benefits include:

• Easy deployment and powerful configuration: ERC-3643 tokens can be deployed on the Fireblocks tokenization engine, directly to the issuer’s workspace, allowing Fireblocks customers to utilize the Fireblocks UI for both deployment and for basic token operations – such as mint and burn. Tokeny’s T-REX Platform is offered to configure and customize token smart contract settings anytime to ensure compliance. The most common transfer rules can be easily set up with existing token settings. However, any additional and customized compliance contracts can be composed thanks to the composability of ERC-3643 by simply adding the additional custom smart contract address.

• Comprehensive Asset Lifecycle Management: ERC-3643 tokens can be distributed to any distribution platform while allowing you to retain controls through compliance and secondary channel management in one single place to ensure interoperability and compliance. Additionally, Fireblocks customers can use their wallets to sign any transaction through the platform adding another layer of security. 

• White-label investor portal: Investors can benefit from an all-in-one dashboard to discover offers, subscribe to tokens, manage their portfolios, and publish OTC offers if allowed. Offering a seamless experience for your investors for both the primary market, buying tokens directly, and the secondary markets, buying or selling with other eligible investors through peer-to-peer delivery vs. delivery swap.  

● Native interoperability with DeFi: Thanks to the built-in compliance rules, the tokens are natively compatible with any DeFi applications that support ERC-20 tokens. However, all compliance rules will be automatically enforced, ensuring security and compliance, and providing legal guarantees to token holders that they are effectively the owners of the tokenized asset.

This in turn enables firms across a variety of business verticals to securely and easily issue tokens for financial assets or stablecoins, allowing any business to capitalize on the efficiencies of blockchain technology, with the ability to automate operations, offer innovative on-chain services, and connect with any desired distributors. 

Fireblocks customers are already utilizing this integration; Fasanara Capital, a Fireblocks customer since 2021, used Fireblocks’ wallet solution to enhance the security of onchain operations, specifically by protecting the onchain signing processes.

Fasanara Capital, a global asset manager with over $4 billion in assets under management, has launched its tokenized money market fund (MMF), FAST. The tokenization of MMF offers fully streamlined operations to enable real-time and open distribution. It delivers an end-to-end digital experience for investors while improving efficiency for fund administration by eliminating manual and fragmented processes. 

The MMFs are tokenized using ERC-3643 smart contracts, the market standard for compliant tokenization. By enforcing controls directly at the token level, rather than at the platform level, ERC-3643 prevents siloed systems and enables seamless interoperability across platforms. Apex Group, the fund’s administrator, uses Tokeny’s blockchain-based platform for lifecycle management and governance of the fund, with security provided by Fireblocks’ enterprise-grade key management and wallet infrastructure to enhance the safety of onchain operations, specifically by protecting the onchain signing process.