USDT Hadron, the tokenization arm of issuer Tether, is partnering with ETF issuer KraneShares and Bitfinex Securities to develop and scale tokenized financial products, the companies said in a statement Thursday.
The initiative plans to create tokenized versions of exchange-traded products and build the systems necessary for them to trade on regulated digital asset platforms.
The companies plan to test institutional appetite for such products and work on the legal and operational design necessary to bring them to market.
Hadron by Tether will provide the tokenization technology, while Bitfinex Securities offers a licensed trading venue under the regulatory supervision of El Salvador. KraneShares, the asset manager best known for its China-focused ETF, plans to move entirely to tokenized offerings in the coming years.
“We believe that our business in the next three to four years will be 100% tokenized and this strategic agreement represents an important step towards that future,” said Jonathan Krane, CEO of KraneShares.
The deal comes as financial institutions explore how to bring real-world assets like stocks, bonds and ETFs onto the chain. Tokenized markets are expected to grow from about $30 billion today to trillions over the decade, according to industry projections.
In practice, a tokenized ETF could allow investors to buy exposure to a fund using digital wallets, with near-instant settlement and fewer intermediaries. Tokenization could also be attractive as a new distribution channel for asset managers, especially in emerging markets where average investors do not need to have brokerage accounts to access products like an ETF.
