Ethereum
Spot Ethereum ETF Approval Strengthens Asset Tokenization on the Ethereum Blockchain
Spot Ethereum ETF Approval Strengthens Asset Tokenization on the Ethereum Blockchain
The approval of Ethereum spot ETFs by the United States Securities and Exchange Commission (SEC) has significant implications for companies engaged in the tokenization of on-chain traded assets. Carlos Domingo, CEO of Securitize, affirmed Ethereum’s regulatory status as a commodity and stated approval is optimistic for the principle of asset tokenization on the Ethereum blockchain.
Domingo highlighted the importance of institutional security in the use of Ethereum, as the approval eliminates concerns over the classification of Ethereum’s native token, ETH, as security. He highlighted that Ethereum is now considered safe for institutional use, strengthening its position as a reliable platform for asset tokenization.
This is advantageous for protocols specialized in tokenizing real-world assets (RWA), 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 Ethereum spot ETFs, ONDO saw a significant increase in its governance token, ONDO, gaining 32.8% over the past week. It is currently trading at $1.23.
Larry Fink, CEO of BlackRock, has long viewed tokenization as the next step for ETFS, envisioning lower fees and instant settlement facilitated by blockchain technology. BlackRock’s $47 million strategic funding round in tokenization company Securitize further solidifies its commitment to the sector.