The giant asset manager Invesco revealed on Tuesday that it will run a crypto investment vehicle known as the Superstate Short Duration US Government Securities Fund (USTB), which holds over $900 million in assets under management. Like BlackRock with its flagship BUIDL fund, Invesco is betting on an emerging category of assets known as “real world assets” or RWAs, which consist of traditional investments packaged in blockchain wrappers.
While BlackRock’s BUIDL, the biggest of the RWA funds, is technically a money market fund that holds both Treasury Bills and repos, Invesco’s USTB, which is the fourth largest RWA fund, holds only T-bills. Another big player in the space is Paxos, which offers a fund backed primarily by physical gold.
While the RWA offerings are still niche products, they are growing fast. Their appeal derives from the blockchain packaging, which lets holders settle trades instantly, freeing up collateral. And unlike stablecoins, they provide easy access to yield. While tokenized funds have so far been marketed primarily to institutional investors, this could change in coming years as players like Invesco and BlackRock, which have large retail customer bases, expand their offerings.
“Invesco has been strategically building the capabilities required to support institutional-grade digital asset products since 2019, and this partnership reflects that long-term commitment,” said Kathleen Wrynn, Global Head of Digital Assets at Invesco, in a statement.
In an interview with Fortune, Superstate founder Robert Leshner explained that his company built USTB and another tokenized fund in part as a prototype to show Wall Street that the RWA concept worked in practice. Founded in 2022, Superstate also operates as a transfer agent and is positioning itself to offer its tokenization technology as a white label service across Wall Street. Superstate’s prime rival in this is Securitize, which provides the technology powering BlackRock’s BUIDL fund.
Leshner declined to provide the financial aspects of the new tie-up between between Invesco and Superstate, which in January raised an $82 million Series B funding round. He did, though, confirm that his firm would serve as an ongoing technology partner to Invesco, and that the financial giant would take over the branding and operations of the T-bill fund.
BlackRock CEO Larry Fink underscored the growing importance of RWAs in his annual shareholder letter that was published on Monday. The letter contains six references to “tokenization,” including in a passage where Fink notes, “Tokenization could help accelerate [the] future by updating the plumbing of the financial system—making investments easier to issue, easier to trade, and easier to access.”
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