SEC Approves WisdomTree’s Request for 24/7 Trading of Tokenized Fund Shares

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TLDR

  • WisdomTree’s WTGXX fund can now be traded around the clock with immediate settlement on the blockchain.
  • The SEC provided exemptive relief permitting the trading of tokenized fund shares at any time.
  • FINRA authorized WisdomTree Securities to act as a principal in trading registered fund shares.
  • WTGXX maintains dividend accumulation even as shares are transferred between wallets on various networks.

The U.S. Securities and Exchange Commission has provided WisdomTree with exemptive relief for its Treasury Money Market Digital Fund (WTGXX), enabling 24/7 trading with immediate settlement. Through blockchain technology and stablecoins, investors now have the ability to transfer, spend, or trade shares at any time. This establishes WTGXX as the inaugural U.S. registered tokenized mutual fund to provide continuous liquidity while dividends accrue across several blockchain networks.

WisdomTree Launches Continuous Trading

Exemptive relief from the SEC has been granted to WisdomTree for its Treasury Money Market Digital Fund (WTGXX). This authorization permits the fund to be traded continuously, every day of the week. WisdomTree has characterized this development as “unprecedented” for a registered mutual fund.

Blockchain technology now enables the fund’s shares to be settled instantly. The conversion of WTGXX shares is facilitated by stablecoins such as USDC and PYUSD. This action is a component of WisdomTree’s strategy to introduce blockchain efficiency into conventional financial products.

Broker-Dealer Approval and Liquidity

An approval from FINRA has been received by WisdomTree Securities to broaden its broker-dealer operations. The company is now permitted to trade WTGXX shares as a principal. This signifies that it engages in direct purchases and sales of fund shares from investors, utilizing its own capital.

According to Will Peck, Head of at WisdomTree, “Instant settlement has been one of the true promises of blockchains and RWA tokenization.” The dealer-principal model guarantees liquidity for investors at all hours.

Fund Mechanics and Dividend Tracking

The Investment Company Act of 1940 continues to govern WTGXX. Dividend earnings persist for investors as long as they hold the shares. Ownership duration is recorded via blockchain timestamps, which permits yield accumulation during transfers between wallets.

The fund’s primary investments are in short-term U.S. Treasuries and government securities. Its shares are designed to trade at a stable value of $1. With a current valuation of $730 million distributed over nine networks, including Ethereum and Solana, the fund offers a 3.5% annualized yield.

Regulatory Coordination and Market Access

The SEC stated that providing exemptive relief is “appropriate in the public interest.” The launch by WisdomTree necessitated coordination with several regulatory bodies. It stands as one of the initial U.S. mutual funds to integrate on-chain settlement with established fund governance.

Jonathan Steinberg, WisdomTree’s CEO, remarked that this advancement demonstrates how “what were once emerging initiatives are now real businesses contributing to momentum today.” The firm has deployed more than $772 million in tokenized assets across multiple blockchain networks.