A team of ex-Gemini executives has launched OpenEden, a crypto startup that enables tokenized US Treasury bills to be traded on-chain. The platform brings the traditional financial instrument of US T-Bills onto the blockchain, creating new opportunities for investing and funding and offering new options for DeFi investors.
OpenEden is a crypto platform founded by Jeremy Ng and Eugene Ng, former heads of Gemini’s Asia Pacific and business development for the region, respectively. The duo left the exchange in December 2021 to work on their crypto venture.
“Something is cooking. Jeremy and I have been working on this since we left. In a couple of months, we will probably be able to disclose something,” Eugene Ng told The Business Times at the time, adding that “many parties” were involved.
It has become clear that the ex-Gemini executives left the exchange for OpenEden. The company aims to bridge traditional finance and cryptocurrencies by tokenizing conventional financial instruments, such as U.S. Treasury bills, and making them accessible on blockchain platforms.
US Treasury bills are one of the safest investments available in the market, issued by the US Treasury Department to fund the government’s operations. OpenEden aims to bring these instruments to the blockchain by tokenizing them.
The platform provides users with a certificate of ownership in the form of TBILL tokens representing the ownership of the underlying T-Bill. The certificate is transferable on the blockchain, enabling users to effectively buy, sell, and trade US T-Bills on secondary markets, providing more flexibility than traditional investments.
The platform is unique because it allows users to trade US Treasury bills without intermediaries, such as banks or clearinghouses. This provides greater transparency and faster settlement times and can reduce trading costs.
“Couple of years back investors were flocking to Defi for yields,” Jeremy said in an interview with Bloomberg. “The tables have turned,” he added, noting that crypto investors can now achieve higher returns in traditional finance as DeFi returns, or APY rates, continue to decline amid the recent crypto meltdown.
Currently, users can redeem TBILL tokens along with an interest rate of 5% based on the yield from the underlying T-bills. DeFi yield on USDC is currently under 2% on Aave and Compound.
Jeremy noted that the TBILL tokens would be issued by a fund regulated in the British Virgin Islands. OpenEden, a registered fund management company in Singapore, will manage the token smart contract vault.
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The rise of decentralized finance (DeFi) has led to the growth of new financial instruments that use novel blockchain technology to achieve more transparency and security while enjoying fast settlement times.
So far, cryptocurrencies have been the only asset class to use blockchain. However, as the DeFi ecosystem matures, more traditional financial instruments are being added to the blockchain. The tokenization of US T-Bills is an example of how DeFi can transform traditional finance and create new opportunities for investment, lending, and funding.
As reported, analysts at global investment bank Citi expect the tokenization of real-world assets could further drive the adoption of blockchain. They predicted tokenization could grow by 80x in private markets and reach almost $4 trillion by 2030.
Global consulting firm BCG is even more bullish on tokenized assets. In September last year, the company estimated that the cumulative size of tokenized assets globally could reach a staggering $16 trillion by 2030. This represents a more than 50,000% growth compared to $310 billion in 2022.
Meanwhile, the total value locked (TVL) in DeFi has sharply declined compared to its all-time highs during the recent crypto downturn. According to data by DefiLlama, there is currently $50 billion locked in DeFi platforms, compared to $180 billion in early December 2021.
All in all, OpenEden’s new platform for tokenized US T-Bills represents an exciting new opportunity for investors looking for lower-risk options in DeFi. It also indicates that as DeFi continues to evolve, more traditional financial instruments will likely be tokenized, creating new opportunities for investing and funding.
Could tokenized US T-Bills further drive crypto adoption among institutional investors? Let us know in the comments below.
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