At our most recent Fireblocks Network Open House in London, we hosted a panel featuring Fireblocks CEO Michael Shaulov, Ownera CEO Ami Ben-David, and Archax Chief Revenue Officer, Nick Donovan.
In the panel, we discussed our new partnership with Ownera, a provider of interoperability technology and transaction orchestration using routers; together, we’re enabling financial institutions to distribute, access and trade tokenized securities on the Fireblocks Network. The panel specifically focused on tokenized Money Market Funds (MMFs), as a first example of a much broader set of asset classes.
The set up will also allow crypto-native market participants on the Fireblocks Network to leverage these tokenized funds as collateral to support their trading activity at licensed exchanges like Archax.
How does Fireblocks’ partnership with Ownera work?
The first asset class to be introduced through the Fireblocks x Ownera partnership is tokenized money market funds (MMFs), providing investors with direct access to MMFs from various sources and blockchains in a unified process. Tokenized MMFs are rapidly growing in popularity, offering instant access to high quality yield-bearing instruments from regulated institutions on chain, and enabling MMFs to be posted as collateral with instant settlement and enhanced collateral mobility at the asset’s source registry.
Leveraging Ownera’s transaction orchestration and interoperability technology, these tokenized assets can be sourced from any tokenization platform connected to an Ownera router, utilizing any blockchain – whether public or private – and supporting a range of digital and non-digital payment options.
The potential for tokenized assets, including tokenized MMFs, represents a multi-trillion-dollar opportunity. To bring this solution to market at scale, Fireblocks and Ownera are partnering with regulated securities providers – such as Archax – as well as multiple sources of tokenized assets from both public blockchain networks and institutional ecosystems.
Fireblocks was built to be ready for the next evolution of digital asset adoption. Investors want access to digital versions of assets that they already understand and are familiar with – we know securities and tokenized real world assets are the next frontier.
Incorporating Archax and driving ecosystem engagement
Fireblocks and Ownera are purely technology companies; for tokenization of funds to truly take hold, regulated entities must also engage. Enter companies like Archax, which serves as an FCA-licensed custodian, broker dealer (nominee), and exchange, as well as tokenizing multiple MMFs and other assets on its own tokenization platform.
For Archax, and other regulated entities, the value proposition is clear. Archax can offer its customers the ability to hold, and make use of, a high-quality, liquid, yield-bearing instrument instead of a stablecoin. Archax already can provide access to more than 100 funds, in multiple currencies, from a range of tier 1 global asset managers.
“Buying, selling, and holding tokenized money market funds is not a conceptual thing, it’s here, now,” Nick Donovan, Chief Revenue Officer of Archax said. “We see demand coming from three avenues. First, from the corporate treasury side, i.e. treasurers managing their corporate balances. Second, on the asset management side, i.e., those managing other people’s money, asking how they can generate some yield on otherwise idle funds. And finally, from stablecoin issuers, who are managing the reserves backing the stablecoins.”
Ownera’s routers allow Fireblocks to connect to assets on a broader range of blockchains, providing access for the first time to financial institutions using the Canton Network and R3 Corda, for example.
The real benefit of this partnership comes not just from holding these assets, but from using them as collateral. Customers are able to do this at Archax’s exchange. These MMFs are issued by the largest financial institutions in the world and therefore carry minimal haircuts, all the while generating yield for the holder.
This could be transformative to financial markets, as these tokenised MMFs could be used for real-time 24/7 liquidity management, even though the underlying assets (treasuries) remain tied to traditional hours and traditional T+1 settlement.
The tokenized securities market has been growing more slowly than crypto, because it’s very fragmented. If you want to buy a security from one issuer, you have to approach a transfer agent, set yourself up with a wallet and possibly a custodian, and you can’t just turn around and buy another one from another issuer. You have to do it all again. But with Fireblocks and Ownera via Archax, we are building a one stop shop. The assets can come from any source, and you can exchange them for USDC or any other stablecoin.
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