Today WisdomTree launched WisdomTree Prime, a mobile app for digital assets. The asset manager is best known for its conventional Exchange Traded Funds (ETFs) and has $94 billion in assets under management. The new app is available in 21 US states and allows investors to buy digital funds of Bitcoin, Ether, tokenized gold, and WisdomTree.

These digital funds do not invest in cryptocurrencies, but are conventional funds tokenized on the Stellar and Ethereum blockchains.

However, the digital funds can only be accessed through the WisdomTree Prime app and cannot be traded on a centralized exchange or DeFi. Late last year, the SEC recognized the record of the funds that allowed WisdomTree to prepare for launch. But there is one feature that will have helped you get the green light. Blockchain is not the only property record. In addition, it uses an SEC-registered transfer agent to keep track of the holders of the shares of the funds.

“We are on the brink of a major shift in financial services, where blockchain-enabled finance will transform the industry as we see it today,” said Jonathan Steinberg, founder and CEO of WisdomTree.

The digital funds include five different Treasury funds and two linked to the S&P 500 stock index.

WisdomTree worked with Securrency for the tokenization of the fund.

Pay your coffee with gold

We expected the gold offering to involve a third party like Paxos which already tokenizes gold. But the digital gold token is issued by WisdomTree Digital Holdings and is backed by gold bullion held in custody in HSBC’s London vaults.

“Bringing traditional assets into the digital ecosystem will allow blockchain technology to be used in a more pervasive capacity, positioning the application to be the center of an investor’s financial life over time,” said Will Peck, director of WisdomTree digital assets.

WisdomTree plans to launch a payment card that allows investors to make payments using gold tokens and other digital assets.

Incumbent Asset Managers vs. Cryptocurrency Startups

Incumbent asset managers are increasingly adopting blockchain. However, their emissions are sometimes combined with those of crypto startups and are often not the same.

For example, tokenized Treasury investments issued by startup Ondo ($133 million market cap) are often considered equivalent to Franklin Templeton’s tokenized money market fund ($300 million market cap) despite the important differences.

For Ondo, he can pay with a stablecoin, a key advantage in a world where cryptocurrency on-ramps and off-ramps are rare. However, investors must go through a KYC process. The token is backed by BlackRock’s iShares ETFs, but the certifications are a hard copy of the ledger system, which means there is some risk.

By contrast, both Franklin Templeton and WisdomTree are the asset managers of the underlying funds.

To invest in the Franklin Templeton fund you have to pay conventionally and you can only invest through the Benji app. We think WisdomTree Prime is similar to Benji in this regard. That could make it less attractive to “crypto bros.” However, in both cases there is the comfort of a well-established regulated brand that will attract major investors.

Contrary to popular perception, a recent Broadridge survey found that a significant proportion of cryptocurrency investors are mainstream, including their choice of metrics to analyze investments. That might explain why Franklin Templeton and WisdomTree can comfortably compete with crypto startups.