Guggenheim issues $20 million worth of tokenized commercial paper on Ethereum

Guggenheim Treasury Securities (GTS), a subsidiary of financial consulting firm Guggenheim Capital, has issued $20 million worth of digital commercial paper (DCP) on Ethereum.

DCP received a credit rating of P-1 from Moody's.

According to a Sept. 26 statement, Guggenheim plans to publish the paper through a blockchain platform developed by Zeconomy called AmpFi.Digital, which provides tokenization services for accredited investors.

Zeconomy CEO Jacinto Cosenza said:

“With tens of billions of dollars locked in DeFi and corporate treasuries, we are excited to partner with GTS to address the clear need for more reliable and secure blockchain solutions.”

The move comes as the market capitalization of the tokenized U.S. Treasury market exceeds $2 billion, with participation from traditional financial giants such as asset managers BlackRock and Franklin Templeton.

BlackRock’s tokenized fund BUIDL has a market capitalization of over $513 million, while Franklin Templeton’s FOBXX closed at $435 million.

Additionally, AmpFi.Digital said in the announcement that it aims to address key challenges in decentralized finance (DeFi) such as poor creditworthiness, high fees, and compliance issues.

Cosenza added that the approval of crypto exchange traded funds (ETFs) in the US and the significant growth of the tokenization market this year have highlighted institutional demand for cryptocurrencies.

Ethereum’s bullish development

Notably, of all tokenized U.S. Treasuries, nearly $1.6 billion has been issued using Ethereum as the infrastructure.

In addition to BlackRock’s BUIDL, Ondo’s USDY and OUSG, and Hashnote’s USYC will significantly increase blockchain participation in the tokenized government securities ecosystem.

Additionally, CoinDesk reported on September 25 that Visa plans to build a platform to help institutional investors issue fiat-backed tokens. Ethereum’s infrastructure also powers the Visa Tokenized Asset Platform (VTAP).

Solana is a strong candidate

Solana holds just 5.5% of the tokenized U.S. government securities market as of September 26, with $122.7 million in tokens issued on its network.

However, Franklin Templeton and Citigroup recently announced that they are eyeing Solana as the next financial product to explore blockchain technology.

At Breakpoint, an event focused on the Solana ecosystem, Franklin Templeton revealed plans to launch a mutual fund natively in Solana. Meanwhile, Citi is considering leveraging the network to enable programmability of money through smart contracts for cross-border payments.

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