Crypto Investing Platform Finblox Starts Offering Tokenized Treasury Yield With OpenEden

Demand for tokenized versions of short-term U.S. government bonds has been increasing as crypto investors turn to real-world assets to earn returns on their investments.

AccessTimeIconJun 13, 2023 at 9:00 a.m. UTC
Updated Jun 14, 2023 at 6:10 a.m. UTC
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Crypto investment platform Finblox has joined the ranks of companies letting investors earn a return from tokenized U.S. Treasury bills (T-bills) on their stablecoin holdings as it looks to become a “crypto superapp,” providing a wide range of financial services.

Investors on the platform can now invest Circle’s USDC stablecoin in decentralized finance (DeFi) protocol OpenEden’s yield-generating TBILL token rights, which are backed by short-term U.S. government bonds, the company said Tuesday.

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  • Tokenized T-bills have grown to a $500 million asset class at the intersection of digital assets and traditional finance products, also known as tokenized real-world assets (RWA). They work like a blockchain-based version of a high-yield savings account, where investors can park their excess stablecoins in short-term U.S. government bonds, generally deemed as one of the safest investments, and earn a return.

    As central banks jacked up interest rates to combat inflation, rising T-bill yields have captivated digital investors dismayed by lending-based yield offerings after last year’s dramatic blowups of Terra, Celsius and BlockFi.

    Finblox sparked controversy in June last year, when it limited user withdrawals as crypto hedge fund Three Arrows Capital, a borrower and yield provider to the platform, imploded. Crypto news site DL News reported last month that dozens of users complained about having their deposits converted to the platform's FBX tokens to cover losses. CEO Peter told CoinDesk in an email that the risks of lending were clearly stated to users, and the platform stopped offering yield from lending. "We have learned the lessons and believe the new product will offer users a much safer way to obtain yield with crypto assets," he wrote.

    Investment management giant Franklin Templeton and DeFi platforms such as Ondo Finance, Maple Finance and OpenEden have stepped up to cater to the demand for sustainable yield by tokenizing money market funds and T-bills.

    So far, however, OpenEden's product has been available for professional investors. Finblox plans offer a way for retail users to invest, too.

    The firm acts as an intermediary and invests in OpenEden's TBILL tokens, which are accessible only to accredited investors and institutions because of regulations. It will pass on the yield to users through Finblox's own "T-Bill Token," Hoang, who co-founded the firm, said in an interview. Finblox will take a cut of as much as 1 percentage point from OpenEden’s estimated annual yield, now at around 5.2%.

    The platform opened access first for professional investors to collect feedback, and will soon expand to users who have performed know-your-customer (KYC) checks and provided proof of address for compliance reasons, Hoang said.

    “This collaboration unlocks unprecedented access to a trillion-dollar market, offering users transparency and trust,” said Qin En, principal at Saison Capital, a venture capital firm that invested in both Finblox and OpenEden. “Beyond portfolio diversification, it offers the potential for more reliable and safer yields.”

    Edited by Sheldon Reback.

    UPDATE (June 13, 13:30 UTC): Adds details about past withdrawal limitations, reports about user complaints and comment from Finblox CEO in fifth paragraph.


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    Krisztian  Sandor

    Krisztian Sandor is a reporter on the U.S. markets team focusing on stablecoins and institutional investment. He holds BTC and ETH.

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