Guggenheim Tokenizes First Digital Commercial Paper on Ethereum

Global investment firm Guggenheim Treasury Securities has issued the first Digital Commercial Paper (DCP) on Ethereum, as the tokenization of financial instruments on blockchains gains traction among traditional finance giants. 

Commercial paper is a kind of short-term debt security that corporations sell to raise funds. It differs from other debt instruments such as bonds and loans because it is unsecured and not backed by collateral. 

Amp.Fi Digital, a blockchain platform designed to issue, trade and provide governance of digital assets, issued $20 million in tokenized commercial paper for Guggenheim on Ethereum, developer Zeconomy said Thursday.

The rollout of yet another tokenized real-world asset follows U.S. federal regulators’ approval of spot Bitcoin ETFs earlier this year, a watershed event that has fueled traditional finance titans’ appetites for blockchain-based digital assets, according to Zeconomy.

Moody’s Investor Service gave Guggenheim’s issuance a rating of P-1, its highest credit rating. 

“As clearly demonstrated by the ETFs approval and the growth of the tokenization space, there is a massive demand for these digital assets, and we want to enable our partners so they can be at the forefront of what could be a transformative moment in the financial industry,”  Zeconomy CEO Giacinto Cosenza said Thursday in a statement. 

The rolling out of DCP on Ethereum marks the latest example of real-world asset tokenization on blockchains—a growing trend. Tokenized government securities such as U.S. Treasury Bills have hit more than $2 billion in market capitalization as institutional interest in the digital asset class accelerates, data from RWA.xyz shows.

In recent months, tokenized Treasury funds’ market capitalization have ballooned. BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL), launched in March, holds $513 million in assets—up more than 100% since its debut, data shows.

Meanwhile, Franklin Templeton’s OnChain U.S. Government Money Fund’s market capitalization (FOBXX) has soared to more than $420 million since its launch in 2021, according to the investment management firm’s data.

Edited by Josh Quittner