USDW Strategy Unveiled by WisdomTree for Propelling Tokenized Financial Progress
In a move to reinforce its digital asset position and establish a compliant tokenized finance ecosystem, asset management firm WisdomTree has revealed its stablecoin strategy. The strategy centres around a Stellar-based stablecoin named USDW (soon to be rebranded as WUSD).
Developing and Promoting WUSD
WUSD, a payment-centric, US dollar-backed stablecoin, is issued by the WisdomTree Digital Trust Company, a New York-chartered trust. The stablecoin is designed primarily for payments rather than yield generation.
Integration with Tokenized Investment Products
WisdomTree's strategy also includes integrating WUSD with its tokenized investment products, such as the Government Money Market Digital fund (WTGXX). This integration allows investors to receive dividends in WUSD or reinvest via a dividend reinvestment program.
Use of WUSD as an Interoperability Layer
WUSD is envisioned as an interoperability layer that enables clients to easily on-ramp and off-ramp between WUSD and established stablecoins like USDC. This enhances flexibility, liquidity, and broad blockchain compatibility beyond a single network.
Operating on the Stellar Blockchain
Initially, WUSD will operate on the Stellar blockchain via the WisdomTree Prime platform, which targets retail users. The company plans to expand WUSD's presence across multiple blockchains to increase scalability and accessibility.
Positioning WUSD as a Genuine On-Chain Asset
WisdomTree aims to position WUSD as a genuine on-chain asset with real blockchain activity, in contrast to some asset managers’ internal-accounting-like stablecoins. This on-chain nature underpins transparency, compliance, and true blockchain interoperability.
A Broader Tokenized Finance Vision
The company's vision extends beyond WUSD, linking it to a diverse set of asset categories such as equities, fixed income, and asset allocation strategies. This multi-use design aims to create a versatile and compliant financial ecosystem supporting payments, treasury operations, reserves management, and on-chain investing use cases.
Compliance and Regulatory Alignment
WisdomTree's stablecoin strategy combines regulatory compliance (supported by its New York Trust Charter and US GENIUS Act alignment), blockchain interoperability, integration with tokenized finance products, and a focused payment use case to build a scalable, multi-functional tokenized finance ecosystem for both retail and institutional users.
Expansion Plans
Initially, WUSD was exclusive to users of WisdomTree Prime, a retail-focused digital asset platform. However, WisdomTree has plans to expand its stablecoin offerings and institutional presence in the future.
Institutional Participation and Growth
Two blockchain wallet addresses hold $466 million worth of WTGXX tokens, indicating significant institutional participation in WisdomTree's tokenized funds. Additionally, approximately $200 million in USDC has already been moved into WisdomTree's tokenized funds by institutional clients.
The company is developing support for continuous trading between tokenized funds and stablecoins throughout the year and expanding retail user access to its platform by enabling deposits and withdrawals using USDC and PYUSD. WisdomTree's enhanced infrastructure appeals to stablecoin issuers, digital asset managers, and crypto firms managing on-chain treasuries.
[1]: Source: WisdomTree Press Release, 2022 [3]: Source: CoinDesk, 2022 [5]: Source: The Block, 2022
- In line with its strategy, WisdomTree is integrating WUSD, a payment-focused stablecoin, with its tokenized investment products such as the Government Money Market Digital fund (WTGXX), enabling investors to receive dividends in WUSD or reinvest via a dividend reinvestment program.
- With plans to expand its stablecoin offerings and institutional presence in the future, WisdomTree is developing support for continuous trading between tokenized funds and stablecoins throughout the year, appealing to stablecoin issuers, digital asset managers, and crypto firms managing on-chain treasuries.
