Layla Zulfa
WisdomTree, a prominent global asset manager with approximately $168 billion in assets under management, announced on Tuesday a landmark shift in the operational structure of its tokenized money market fund. By enabling instant settlement and 24/7 trading for the WisdomTree Treasury Money Market Digital Fund (WTGXX), the firm has effectively decoupled the product from the traditional constraints of Wall Street’s legacy infrastructure. This development, facilitated by a specific exemptive relief from the U.S. Securities and Exchange Commission (SEC), represents a significant step toward the full integration of blockchain technology within the regulated financial system.
The move is designed to address one of the most persistent inefficiencies in traditional finance: "cash drag." In conventional markets, the delay between a trade and its final settlement—historically ranging from one to two business days (T+1 or T+2)—results in capital being temporarily sidelined, unable to earn yield or be redeployed. By leveraging blockchain technology for instant settlement, WisdomTree aims to eliminate these gaps, ensuring that capital remains productive at all times. The firm noted in a press release that this transition harnesses the innate advantages of digital assets, such as transparency, speed, and continuous availability, while maintaining the rigorous protections afforded by federal securities laws.
The Regulatory Breakthrough and SEC Exemptive Relief
The core of this operational evolution lies in an exemptive relief order issued by the SEC. Traditionally, funds registered under the Investment Company Act of 1940 are required to calculate their Net Asset Value (NAV) once per business day, typically immediately following the close of U.S. markets. This daily "strike" of the NAV dictates the price at which shares are bought or sold. However, WisdomTree sought and received permission for investors to trade shares of WTGXX at a stable $1 price with a dealer on an intraday basis, regardless of the fund’s fluctuating NAV during the day.
This regulatory green light allows WTGXX to function with the liquidity and utility of a stablecoin while remaining a fully regulated security. Brian Daly, the SEC’s Director of the Division of Investment Management, emphasized the agency’s role in this transition. Daly noted that the SEC is committed to working with market participants to foster innovation and modernization, particularly regarding the tokenization of capital markets. He further explained that the relief preserves the essential protections of a regulated money market fund while providing retail and institutional investors with necessary intraday liquidity.
The SEC’s relief order explicitly stated that the approval was "appropriate in the public interest." This indicates a growing institutional comfort with blockchain-augmented products. Furthermore, the decision aligns with broader agency objectives. In July, SEC Chair Paul Atkins highlighted "Project Crypto," an initiative aimed at modernizing securities regulations to enable financial markets to move on-chain. The WisdomTree approval is viewed by many industry analysts as one of the first major tangible results of this regulatory shift.
Technical Mechanisms: Instant Settlement and Dividend Accrual
To achieve 24/7 trading and instant settlement, WisdomTree’s broker-dealer subsidiary secured approval from the Financial Industry Regulatory Authority (FINRA) to engage in principal trading for WTGXX. This allows the firm to act as a market maker, providing constant liquidity. Investors can exchange their shares for stablecoins at any hour, effectively bridging the gap between the traditional banking system and the digital asset ecosystem.
A critical technical innovation introduced in this rollout is the method of dividend accrual. Unlike traditional funds where yield is calculated based on end-of-day holdings, WTGXX utilizes blockchain timestamps to track the exact duration an investor holds a token. This precision ensures that shareholders continue to earn yield even as the asset moves between different digital wallets. By using the blockchain as a "golden record" of ownership, WisdomTree has solved the "dirty price" vs. "clean price" dilemma often found in bond trading, where accrued interest must be manually calculated and accounted for during a sale.
WisdomTree described this functionality as "unprecedented." By allowing the fund to move at the speed of the internet rather than the speed of the New York Stock Exchange, the product transforms from a passive investment vehicle into a form of "programmable cash." It can be spent, traded, or used as collateral in digital environments without waiting for traditional banking windows to open.
Market Context and the Growth of Tokenized Treasuries
The WisdomTree Treasury Money Market Digital Fund (WTGXX) is a significant player in the rapidly expanding Real-World Asset (RWA) tokenization sector. As of late February, the fund was valued at approximately $730 million. It offers an annualized percentage yield (APY) of 3.5% and is backed by high-quality U.S. Treasury obligations. The fund has been issued across nine different blockchain networks, including Ethereum and Solana, ensuring broad interoperability across the decentralized finance (DeFi) landscape.
The tokenized Treasury market has seen explosive growth over the past 24 months. According to data from RWA.xyz, the total value of tokenized government securities has surpassed $2 billion. WisdomTree’s WTGXX competes with other major institutional offerings, such as BlackRock’s BUIDL (BlackRock USD Institutional Digital Liquidity Fund) and Franklin Templeton’s FOBXX (Franklin OnChain U.S. Government Money Fund).
While BlackRock’s BUIDL currently leads in terms of total assets under management, WisdomTree’s recent regulatory relief for 24/7 retail trading and instant settlement provides it with a unique competitive edge. Most other tokenized funds still rely on traditional settlement windows or are restricted to "qualified purchasers" (institutional investors with high net worth). WisdomTree’s focus on retail accessibility and intraday liquidity positions WTGXX as a hybrid product that appeals to both traditional savers and crypto-native users.
A Timeline of WisdomTree’s Digital Evolution
The transition to 24/7 trading is the culmination of a multi-year strategy by WisdomTree to integrate blockchain into its core business model.
- Early 2022: WisdomTree begins the development of its digital asset infrastructure, focusing on a mobile application (WisdomTree Prime) that would allow retail users to interact with tokenized assets.
- December 2022: The firm launches the WisdomTree Treasury Money Market Digital Fund, receiving initial SEC registration under the 1940 Act.
- 2023: WisdomTree expands the fund’s availability to multiple blockchains, including Stellar and Polygon, emphasizing a "chain-agnostic" approach to distribution.
- Early 2024: The firm receives a New York State Department of Financial Services (DFS) charter for a limited-purpose trust company, allowing it to provide custody for digital assets.
- February 2025: The SEC grants the exemptive relief necessary for intraday $1 trading, and FINRA approves principal trading for the broker-dealer subsidiary, leading to the current announcement of 24/7 instant settlement.
Will Peck, Head of Digital Assets at WisdomTree, noted that these approvals from the SEC and FINRA are paving the way for a fundamental transition in how capital markets operate. "This is a true innovation and improvement in the investor experience," Peck said. "It demonstrates how blockchain can serve as a new set of rails for capital markets."
Implications for the Broader Financial Ecosystem
The implications of WisdomTree’s success in securing this relief extend far beyond a single fund. It signals a shift in the regulatory paradigm where the "form" of the asset (a blockchain token) is no longer seen as a barrier to its "function" (a regulated security).
For institutional treasurers, the ability to move millions of dollars in and out of a yield-bearing instrument at 3:00 AM on a Sunday is a transformative capability. It allows for more precise cash management and reduces the need to hold non-earning cash in clearing accounts. For retail investors, it offers a regulated alternative to stablecoins, which often carry opaque risks regarding their underlying reserves. Because WTGXX is a regulated money market fund, its holdings are transparent and subject to strict SEC oversight regarding credit quality and maturity.
Furthermore, this development sets a precedent for the tokenization of other asset classes. If the SEC is comfortable with the intraday trading of money market funds at a stable price, it may eventually extend similar relief to tokenized corporate bonds, municipal debt, or even private equity.
However, challenges remain. The industry must still navigate the complexities of cross-chain liquidity and the potential for technological vulnerabilities in smart contracts. WisdomTree’s reliance on nine different networks requires robust security protocols to ensure that the "golden record" of ownership remains synchronized across all ledgers.
Conclusion: The New Rails of Capital Markets
WisdomTree’s announcement marks a definitive break from the "T+1" settlement era. By integrating the speed of digital assets with the regulatory rigor of the Investment Company Act of 1940, the firm has created a template for the future of finance. The ability to trade WTGXX shares 24/7 at a stable value effectively turns a traditional investment into a functional medium of exchange.
As the SEC continues to modernize its rules under "Project Crypto," and as more institutional players enter the RWA space, the line between traditional banking and blockchain technology will continue to blur. WisdomTree’s move ensures that it remains at the forefront of this evolution, offering a product that meets the demands of a global, always-on economy while maintaining the trust and safety of a regulated financial institution. The successful implementation of instant settlement for WTGXX is not just a technical upgrade; it is a preview of a financial system where capital is never idle and markets never close.
