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Institutional DeFi player OpenTrade is launching a tokenized treasury bill product for accredited investors. The company will be utilizing Perimeter Protocol, an open-source platform developed by Circle, to expand USDC into the world of real world assets (RWA).
“USDC can add a bunch of efficiencies into the traditional finance sector,” said Jeff Handler, OpenTrade’s co-founder and chief commercial officer.
Handler explained that while working at Circle and seeing how USDC worked under the hood, the founding team had a lightbulb moment and got to work building OpenTradet. “USDC can have a lot of added value for structured finance,” he said.
OpenTrade’s aim, Handler told Decrypt, is to add an extra layer of utility for the increasing interest in the digital asset space. Interest, Handler said, that has been increasing “as more people try to take advantage of yield products that aren’t a pain.”
Today’s launch showcases a 1:1 backed tokenization product. Essentially, for every tokenized t-bill an investor purchases, the company will be buying an actual treasury bill and providing an on-chain identifier for the underlying asset.
“That will help in the transparency this industry needs,” he said.
The product will also allow secured lending of USDC against treasury bills, allowing lenders to earn returns while continuing to operate entirely on-chain—using their existing wallets and custodians—the company said in a press release.
Spawned by the open-source research center at Circle, Perimeter Protocol provides what Handler calls a “tried and tested technology stack.” He explained that its mission has been to build the infrastructure necessary to leverage USDC around the world.
That’s very intentional, Handler said. Instead of a securities instrument, OpenTrade set itself up as a secured lending product, which is unregulated globally, said the CCO. This will allow the company to not have to worry about which jurisdictions they operate in. But it also means it won’t be available in the U.S. for now.
Working with a network of financial institutions to power off-chain assets, Handler said he is “Pleasantly surprised with their appetite to work with them as clients.” And that’s despite the crypto industry being at the forefront of banking turmoil in the U.S. and more recently in the U.K.
For Handler, who got involved in crypto in 2013 and was part of the first Bitcoin wallet on iPhone, he sees OpenTrade offering a digital U.S. treasury bill savings account for people outside the country as a product that’s “nearly risk-free.”
The new product, according to today’s press release, is available to individual accredited investors, companies, funds, DAOs, regulated institutions and “third party distribution partners.”
Handler concluded that his company is at the forefront of a product that will take its time to enter the legacy system: “I am not very confident that we will see in the near future the equivalent of an OpenTrade product in traditional finance.”