A way to earn sustainable yield has landed in Southeast Asia as cryptocurrency asset management platform Finblox brings tokenized US Treasurys to emerging markets across the region. The Singapore-based startup’s “superapp” will partner with OpenEden to bring a smart contract vault providing 24/7 access to tokenized Treasury bills for customers in the Philippines, Indonesia, India, and Vietnam.
Treasury bills are widely regarded as one of the safest assets available. In partnering with OpenEden, an institution accredited and licensed by the Monetary Authority of Singapore, Finblox aims to offer a safer and less risky mechanism for generating sustainable yield in emerging markets, where a significant portion of the unbanked population resides.
Tokenized Treasurys give international investors the chance to invest in safe and secure assets in smaller increments. Furthermore, OpenEden’s Treasury bill vault will integrate with Chainlink to provide on-chain evidence that tokens are backed by actual assets.
However, as promising as this new opportunity appears, it still comes with some level of risk. Government default, while highly unlikely, is a potential risk, as are smart contract risks. According to Peter Hoang, CEO of Finblox, about 95% of assets are deployed, with only 5% held in a vault for withdrawals, leaving that 5% exposed to smart contract risks.
Additionally, as Finblox is a regulated entity, customers must complete two levels of regulation before being eligible to purchase Treasurys: ID verification and proof of address. These requirements allow Finblox to determine deposit and withdrawal limits based on verifications.
Despite the risks, tokenized T-bills may provide a means to regain user trust after unsustainable practices led to the downfall of many crypto players last year. Providing users with the opportunity to invest in safe and secure assets could help foster trust in the cryptocurrency space as it continues to evolve.
As Finblox and OpenEden continue their partnership to bring tokenized US Treasury bills to customers in emerging markets, the question remains: will the benefits outweigh the potential risks, and can this new opportunity help restore trust in the world of cryptocurrency? Only time will tell.
Source: Blockworks
