By Michael Scott
Celisa Morin, Redd Smith’s head of legal and a Grayscale ex-executive, claims traditional financial institutions will possibly follow BlackRock’s lead in utilizing public blockchains.
The ex-Grayscale executive notes that traditional financial institutions (TradFi) are portraying preference for public blockchains in tokenizing their assets.
According to Celisa Morin, a new BlackRock-governed narrative among TradeFi institutions could result in more companies seeking to tokenize assets on public chains than private.
BlackRock Tokenizes on Ethereum Blockchain
Morin served as the Vice President of Platform Distribution at Grayscale until mid-last year. She noted that they are showing a declined inclination towards private chains with JPMorgan’s Onyx.
Morin currently heads the crypto department at Reed Smith, a global law company. She said it would be sensible for more prominent traditional finance institutions to follow BlackRock’s lead.
On March 18, BlackRock unveiled ‘BUIDL,’ its $100M tokenized fund on the Ethereum network. According to Dune Analytics data, this fund has $288M in assets.
BlackRock’s strategy to unveil a fund on Ethereum had controversies. In this case, its on-chain wallet rapidly became the target of several tricks from crypto fans.
Deposits to BlackRock’s public wallet featured inflows of suspicious transactions from Tornado Cash, which OFAC has sanctioned. Besides, it entailed a list of cryptocurrencies from memecoins and real-world asset (RWA) tokenization projects.
More Tokenizing on Public Blockchains
Choosing to tokenize assets on public blockchains rather than using a more KYC and AML-friendly private network has some possible legal issues. However, Morin claimed that several firms might take BlackRock’s lead.
Specifically, she noted that if BlackRock had made the choices, she would not have been aware of why others would be held back.
In addition, she said that Franklin Templeton had made the ‘forward thinking’ strategy to unveil its tokenized money market fund on Polygon, the Ethereum layer-2 network, in October 2023.
Currently, FOBXX has $360.2M in United States Treasurys. Overall, $1.08B in United States Treasurys have been tokenized across 17 products.
Spot Ethereum Exchange-Traded Fund (ETF) in May Doubtful
Spot ether exchange-traded funds (ETFs) did not excite Morin. She said the probability of approval next month is impossible.
In the past, Morin has worked with the legal team in the lead-up to Grayscale unveiling its Bitcoin exchange-traded fund. Hence, she agreed with the latest view that the absence of communication between potential fund issuers and the US Securities and Exchange Commission (SEC) was a bad indicator.
Morin echoed the opinions of Eric Balchunas, a senior ETF analyst, by saying that the possibility of ratification by the May 23 deadline became slimmer every day the SEC failed to engage in public comment.
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