Guggenheim Treasury Securities (GTS), a subsidiary of financial consulting firm Guggenheim Capital, has issued $20 million worth of digital commercial paper (DCP) on Ethereum.
DCP has received a P-1 credit rating from Moody’s.
According to a September 26 statement, Guggenheim will publish the paper through a blockchain platform developed by Zeconomy called AmpFi.Digital, which provides tokenization services to qualified investors.
Zeconomy CEO Giacinto Cosenza said:
“With tens of billions of dollars locked in DeFi and corporate coffers, we are excited to work with GTS to address the clear need for more trustworthy and secure blockchain solutions.”
The move comes as the market capitalization of the tokenized US Treasury bond market has surpassed $2 billion, with participation from traditional financial heavyweights such as asset managers BlackRock and Franklin Templeton.
BlackRock’s tokenized fund BUIDL has a market capitalization of over $513 million, while Franklin Templeton’s FOBXX Trail closed at $435 million.
Additionally, AmpFi.Digital said in its announcement that it aims to solve key decentralized finance (DeFi) problems such as low credit quality, high fees, and compliance issues.
Cosenza added that the approval of cryptocurrency exchange-traded funds (ETFs) in the U.S. and significant growth in the tokenization market this year have highlighted institutional demand for cryptocurrencies.
Ethereum’s optimistic development
In particular, nearly $1.6 billion of tokenized U.S. Treasury bonds are issued using Ethereum as its infrastructure.
In addition to BlackRock’s BUIDL, Ondo’s USDY, OUSG, and Hashnote’s USYC significantly increase blockchain’s participation in the tokenized government securities ecosystem.
Moreover, CoinDesk reported on September 25 that Visa plans to create a platform to help institutional companies issue fiat-backed tokens. Ethereum’s infrastructure will also power the Visa Tokenized Asset Platform (VTAP).
Solana is a rising contender
Solana holds just 5.5% of the tokenized U.S. government securities market as of September 26, with $122.7 million in tokens issued on the network.
However, Franklin Templeton and Citigroup recently announced that they are eyeing Solana as the next financial product exploring blockchain technology.
At Breakpoint, Solana’s ecosystem-focused event, Franklin Templeton announced plans to launch a mutual fund based on Solana. Meanwhile, Citi is considering leveraging the network for fund programming capabilities through smart contracts targeting cross-border payments.