according to material from the site - By Cointelegraph
S&P Dow Jones Indices (S&P DJI) is in talks with major exchanges, custodians, and DeFi protocols regarding licensing and listing tokenized versions of its benchmarks, Stephanie Routon, the director of U.S. equities, reported.
Routon told Cointelegraph that the index provider is taking a "strategic approach" to ensure that S&P tokenized products are launched only on platforms that meet high standards of transparency, security, and regulatory compliance.
"By establishing such relationships, we hope to collaboratively work on creating a reliable infrastructure that will support the trading and accessibility of tokenized versions of our indices, ultimately enhancing the investor experience," she said.
The development of blockchain is occurring against a backdrop of growing interest from institutional investors in tokenized financial products. Earlier this year, S&P DJI entered this market by licensing the S&P 500 for a tokenization initiative in partnership with Centrifuge, which uses official data to offer programmable index funds through smart contracts.
Routon noted that this move has already sparked a "surge of interest and engagement" from market participants in both traditional finance (TradFi) and decentralized finance (DeFi). "This interest reflects a broader market trend as investors increasingly seek innovative and efficient ways to engage with existing financial products," she added.
Routon noted that blockchain technology has "transformative potential" in financial markets. "As demand for digital assets grows, tokenization can play a crucial role in bridging the gap between traditional and decentralized finance," Routon remarked.
She added that S&P DJI's tokenization strategy aligns with the company's mission to meet the needs of a "new generation of investors looking for innovative ways to engage with established benchmarks." The greatest interest in tokenized index products is observed among digital investors, including participants in the cryptocurrency and blockchain markets, as well as organizations looking to diversify portfolios. Regionally, Europe, Asia, and Latin America are leading.
Routon also reported that the company is evaluating the tokenization opportunities of other flagship indices, such as the Dow Jones Industrial Average and thematic indices. "We understand that different segments of investors may have varying interests in specific indices, and we will strive to respond to market demand accordingly," she said.
Routon stated that by 2030, tokenized indices will become a "key" component of global markets, expanding cross-border access to markets and increasing liquidity. This technology could lower traditional investment barriers while opening up new strategies utilizing DeFi features such as fractional ownership and automated trading.
However, she refuted the claim that tokenization threatens the traditional licensing business of S&P DJI. Instead, she described it as an "additional innovation" that expands commercial opportunities and opens access to index investing for a new audience without jeopardizing the integrity of the benchmarks.
Routon's comments came amid the ongoing growth of tokenized stocks: the market capitalization of blockchain-based financial products reached $370 million by the end of July.
Last week, OpenEden entered into a partnership agreement with BNY Mellon to manage and custody the assets underlying its tokenized U.S. Treasury product TBILL. This is the first tokenized Treasury fund rated 'A' by Moody's, utilizing a global custodian.
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