Stablecoin developer Ethena Labs and real-world asset (RWA) tokenization company Securitize are launching a new blockchain for retail and institutional investors seeking access to the DeFi and tokenization economies.
According to a March 17 announcement, the forthcoming Converge blockchain is an Ethereum Virtual Machine that will provide retail investors with access to “standard DeFi applications.” It will also specialize in institutional-grade offerings that will help bridge traditional finance with DeFi opportunities.
The Converge blockchain is announced at the Tokenize NYC conference on March 17. Source: Cointelegraph
Converge will launch with various product offerings, including Ethereal, Morpho, Maple Labs, Pendle and Aave Labs’ Horizon.
Converge’s RWA infrastructure will benefit from Securitize’s growing presence in the tokenization market, with nearly $2 billion minted across various blockchains. The company recently announced that BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) has surpassed $1 billion in net assets one year after launch.
The Converge blockchain will receive custodial support from Anchorage and Copper as well as custodial support from Securitize’s latest partner, RedStone.
On the DeFi side, Converge will allow users to stake Ethena’s native governance token, ENA. Ethena’s USDe (USDE) and USDtb stablecoins will serve as the network’s gas tokens.
Related: BlackRock CEO wants SEC to ‘rapidly approve’ tokenization of bonds, stocks: What it means for crypto
Institutional DeFi on the rise
Institutional DeFi — when traditional financial institutions adopt regulatory-compliant DeFi systems — appears to be gaining traction as companies look to optimize their operations and access new yield opportunities.
Even JPMorgan, once a blockchain and Bitcoin (BTC) skeptic, said institutional DeFi “has the potential for growth and transformative impact.”
RWAs are accelerating this trend, with the likes of McKinsey forecasting a $2 trillion tokenization market by 2030.
As Neoclassic Capital co-founder Michael Bucella noted in an interview with Cointelegraph, RWAs are attracting big investors because they address “pricing inefficiencies” in both traditional and digital assets.
“To TradFi, that is mispriced credit facilities (i.e., cost of capital) or exposure to underpriced volume. To crypto-native, that is low-volume, secure assets,” said Bucella.
Including stablecoins, which are onchain representations of fiat currencies, the total RWA market has exceeded $240 billion, according to industry data.
Excluding stablecoins, the total value of RWAs onchain is fast approaching $20 billion across more than 90,500 holders, according to RWA.xyz.
The new issuance volume of RWA shows a significant growth in stablecoins, US Treasury and private credit debt. Source: RWA.xyz
Related: Bitwise makes first institutional DeFi allocation
