Guggenheim Treasury Securities (GTS), a subsidiary of financial advisory firm Guggenheim Capital, has issued $20 million worth of Digital Commercial Paper (DCP) on Ethereum.
DCP received a P-1 credit rating from Moody’s.
According to a September 26 release, Guggenheim will release the document through a blockchain platform developed by Zeconomy called AmpFi.Digital, which offers tokenization services to qualified investors.
Giacinto Cosenza, CEO of Zeconomy, said:
“With tens of billions of dollars locked in DeFi and corporate treasuries, we are excited to partner with GTS to address a clear need for more reliable and secure blockchain solutions.”
The move comes as the token market for U.S. Treasuries surpassed $2 billion in market capitalization, with participation from traditional finance heavyweights such as asset managers BlackRock and Franklin Templeton.
BlackRock’s tokenized fund, BUIDL, has a market cap of over $513 million, while Franklin Templeton’s FOBXX closes at $435 million.
Additionally, AmpFi.Digital said in the announcement that it aims to address key challenges in decentralized finance (DeFi), such as poor credit quality, high fees, and compliance issues.
Cosenza added that the approval of crypto exchange-traded funds (ETFs) in the United States and the substantial growth of the tokenization market this year have highlighted institutional demand for crypto.
Bullish developments for Ethereum
Notably, nearly $1.6 billion of all tokenized US Treasuries are issued using Ethereum as infrastructure.
In addition to BlackRock’s BUIDL, Ondo’s USDY and OUSG and Hashnote’s USYC significantly increase blockchain’s participation in the tokenized government securities ecosystem.
Additionally, CoinDesk reported on September 25 that Visa plans to create a platform that will help institutional firms issue tokens backed by fiat currencies. Ethereum’s infrastructure will also power the Visa Tokenized Asset Platform (VTAP).
Solana is a rising competitor
Solana held just 5.5% of the market for tokenized U.S. government securities as of September 26, with $122.7 million in tokens issued on the network.
However, Franklin Templeton and Citigroup recently announced that they are considering Solana for their upcoming financial products exploring blockchain technology.
At the Solana ecosystem-focused Breakpoint event, Franklin Templeton revealed plans to launch a mutual fund natively on Solana. Meanwhile, Citi plans to leverage the network for money programmability via smart contracts aimed at cross-border payments.
