Stablecoins are ‘tip of the iceberg’

We’re just a day away from Permissionless. Meaning industry leaders will willingly venture toward a Brooklyn heat wave for the greater good of meaningful conversations.

The topic of rebooting the global financial system seems to qualify. That’s the title of a panel I’ll be moderating next Thursday, and Ondo Finance CEO Nathan Allman will be among those on stage with me. 

I caught up with Allman earlier this week. He noted Circle’s successful IPO, which he said has created “even more of a buzz” around the space and what’s next. (CRCL stock has surged since the Senate’s GENIUS Act passage.)

“I think it’s the tip of the iceberg,” Allman said of stablecoins. “We’re going to see, in a lot of ways, the exact same playbook being run for other large, liquid assets.”

He’s talking about tokenized exposure to Treasurys (i.e. Ondo’s USDY or BlackRock’s BUIDL), for example, as well as stocks, bonds and ETFs. (Invesco recently signaled — after hiring a digital assets head — it would be exploring initiatives to possibly tokenize its funds).

There’ve been plenty of attempts to tokenize private markets too. Allman told me that while working at Goldman Sachs (2019-21), his team spent time exploring tokenization for syndicated loans, which can take weeks to settle.

“But in reality there’s a lot of general automation and digitization and standardization of documentation that has to be done before tokenization really is the limiting factor of accessibility,” the Ondo CEO said. “So I think that work is being done around a lot of these other asset classes in parallel.”

Put another way, tokenizing illiquid asset classes doesn’t make them liquid, Allman added. And liquidity is obviously important. 

He acknowledged that firms like BlackRock and Apollo Global Management are focused on creating more liquidity around private asset classes, and that will help allow for broader tokenization adoption there in the future. 

Apollo started offering tokenized access to its Diversified Credit Fund in January. Christine Moy, the firm’s head of digital asset strategy, is set to join Allman on next week’s panel; I’m looking forward to hearing her take on all of this. 

Back to what Allman considers to be “the low-hanging fruit” — the very liquid, large US securities — he said he left his latest meeting with the SEC feeling optimistic. That is, in the sense that there could be a path to offer these (via Ondo’s soon-to-launch Global Markets platform) in the US at some point.

The bottom line, Allman said: The projections of tokenization growth (in the $ trillions) won’t hold the same significance as it gets normalized — in both permissioned and permissionless environments.

“The vast, vast majority of regulated financial assets will settle on blockchain rails in the future,” he noted. “That’s not a crazy prediction.”

My full Q&A with Allman will hit Blockworks.co on Monday.

— Ben Strack

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The Roundup

Empire: Transparency is the name of the game. Katherine covered Blockworks’ new framework that aims to correct informational asymmetry in crypto markets. 

Forward Guidance: Chair Powell probably needs a vacation. Felix did a deep dive of the dots following Wednesday’s FOMC meeting, so you can get the scoop here. 

Lightspeed: The race is on. The Solana ETF race, that is. Jack outlined the eight contenders vying to list them.

0xResearch: EigenCloud wants to be crypto’s AWS. Sounds pretty AWSome to me (sorry). You can check out Macauley’s recap here. 

The Drop: AI is fine, but Walrus-powered AI? Sign me up. Kate covered a new model that lets startups train, run and store their own custom AI models.

Supply Shock: The scenario of BTC going to zero doesn’t really exist anymore. But it wasn’t always this way — David outlined the time it happened (and the unlikely name behind it). 

Blockchain tech altering the global economy is no longer a distant hope. With the market projected to grow almost 600% over the next five years, it’s safe to say the blockchain revolution is well underway.

The latest report from Blockworks Research and OKX shows how blockchain is a new alternative, shifting the landscape for 4 major industries: financial services, technology, consumer goods, and entertainment. 

These data-driven insights on the future of blockchain are a must-read for degens and empire builders alike.