Copper Secures Regulatory Approval for Tokenized Fund Custody
Cryptocurrency custodian Copper has announced it will now provide custody services for tokenized money market funds, including BlackRock's BUIDL. This follows regulatory approval from the Financial Services Regulatory Authority (FSRA) in Abu Dhabi, enabling clients to use these tokens as collateral in derivatives trading.
Key Developments:
- Regulatory Milestone: FSRA approval allows Copper to support tokenized fund transactions.
- Collateral Utility: Clients can leverage money market fund tokens in derivatives markets.
- Strategic Partnerships: Collaborations with Securitize, Franklin Templeton, Ondo, and Hashnote enhance tokenization infrastructure.
Tokenized Treasuries—digital representations of U.S. government bonds—are leading the integration of real-world assets (RWAs) into blockchain ecosystems. These assets trade on networks like Ethereum, Solana, and Stellar, streamlining settlements and improving liquidity.
👉 Explore how tokenization is transforming finance
Market Growth and Strategic Vision
The tokenized Treasury market has surged from $780 million in January 2024 to $2.3 billion, according to rwa.xyz. Copper’s CEO, Amar Kuchinad, highlights the potential for tokenized funds to boost returns in a high-interest-rate environment:
"Tokenized money market funds could enhance derivative market yields by generating income from posted collateral."
Kuchinad, a former SEC adviser, succeeded Dmitry Tokarev as CEO in October 2024, signaling a strategic shift toward compliance and institutional adoption.
FAQs
1. What are tokenized money market funds?
They are blockchain-based representations of traditional funds, enabling fractional ownership and 24/7 trading.
2. How does Copper’s custody service work?
Copper securely stores digital fund tokens and facilitates their use in trading/collateralization.
3. Which funds are supported?
BlackRock’s BUIDL and partners like Franklin Templeton’s offerings are currently included.
For institutional investors, tokenization bridges TradFi and DeFi, offering unparalleled efficiency.
👉 Learn more about blockchain-powered asset management
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