July 22, 2024
Moody’s A-bf Rating
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Moody’s Grants “A-bf” Rating to OpenEden’s Tokenized Fund

Global credit rating agency Moody’s Ratings has granted an “A-bf” bond fund rating to Hill Lights International Limited, the issuer of OpenEden’s tokenized United States Treasury bills, known as TBILL Tokens. This rating underscores the fund’s strong capacity to meet its financial goals, positioning it just below the highest triple-A (AAA) rating.

High Credit Rating for Tokenized Treasury Bills

The “A-bf” rating from Moody’s is a noteworthy achievement, indicating a high level of creditworthiness. This rating suggests that the bond fund is well-positioned to achieve its financial objectives. Moody’s, along with Standard & Poor’s and Fitch Ratings, is recognized as one of the top three global credit rating agencies, lending significant credibility to the rating.

OpenEden’s tokenized fund, which invests primarily in U.S. Treasury bills and government securities, is considered a secure investment due to the backing of the U.S. government. The process of tokenization, which involves converting rights to an asset into a digital token on a blockchain, enables assets such as bonds, real estate, and artwork to be traded online, enhancing liquidity and accessibility.

Institutional Investment and Performance

OpenEden’s TBILL Tokens are currently available exclusively to institutional investors, boasting over $36 million in total value locked. The fund offers an estimated annual return of 4.99% while charging a minimal transaction fee of 0.05%. According to OpenEden, the fund allows users to access U.S. Treasury securities through smart contracts without restrictions on trading hours or location, reflecting a significant advancement in financial technology.

Moody’s has previously rated several tokenized bonds, including those issued by the European Investment Bank (EIB), further cementing the relevance of tokenized assets in the financial markets.

Growth of Tokenized Treasurys

The integration of traditional finance with blockchain technology continues to gain momentum, with over $1.5 billion in U.S. Treasurys now tokenized. This trend is being driven by traditional Wall Street players such as BlackRock and Franklin Templeton. BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) has quickly grown to manage $462.7 million in assets, while Franklin Templeton’s OnChain U.S. Government Money Fund (FOBXX), tokenized on the Stellar and Polygon blockchains, holds $357.6 million.

In a pioneering move, Woo X Exchange launched the world’s first tokenized T-bills for retail customers in April, enabling investors to earn yields on USD Coin holdings backed by U.S. T-bills.

Conclusion

The “A-bf” rating awarded by Moody’s to Hill Lights International for OpenEden’s tokenized fund signifies a strong endorsement of the fund’s financial robustness and innovative approach. As the market for tokenized assets expands, institutional investors are increasingly recognizing the potential of blockchain technology to transform traditional finance. With substantial investments and advancements in the tokenized Treasury sector, the integration of digital assets into mainstream finance appears poised for significant growth.

Image by vectorjuice on Freepik

Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

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