The first one: Last week, WisdomTree received SEC exemptive relief from the forward pricing rule, the regulation that requires all U.S. mutual fund orders to be executed at the daily NAV strike. The exemption allows WisdomTree’s broker-dealer to trade its tokenized government money market fund 24/7 at a fixed $1 price on the secondary market. It’s the first relief of its kind.
Why it matters: The forward pricing rule has been a key structural barrier preventing U.S. mutual funds from offering continuous trading. With this exemption, the fund delivers real-time execution, T+0 settlement, and yield that accrues in proportion to how long you hold it.
“DeFi markets demand exactly what we now have: 24/7 liquidity and continuous accrual. Getting this exemption is a foundational piece to be in place for our work in DeFi integrations,” explained Maredith Hannon, Head of Business Development Digital Assets at WisdomTree.
Interview: In our conversation, Hannon breaks down why this exemption matters for connecting traditional financial infrastructure with onchain markets, how the fund operates in practice, how yield is distributed to investors, and where integration efforts with DeFi protocols are headed next.
__________________
For readers less familiar with the regulatory background: what did the SEC actually grant you, and why does it matter?
“U.S. mutual funds are governed by something called the forward pricing rule under the Investment Company Act of 1940. In practice, this means all orders are executed at the next calculated NAV — typically once a day at 4 p.m. ET. That made true 24/7 trading structurally impossible for any mutual fund, including ours.
What the SEC exemptive relief does with respect to the WisdomTree Treasury Money Market Digital Fund (WTGXX) is allow a broker-dealer to transact in fund shares on a principal basis at a fixed $1 NAV, removing the forward pricing constraint in the secondary market. Crucially, WTGXX is still maintaining the full 1940 Act Rule 2a-7 structure, fixed NAV, transparent holdings, bankruptcy remoteness, and liquidity requirements. None of the core investor protections change.
This is an incremental but critical building block toward atomic-style settlement between traditional finance and crypto-native markets. There were many conversations across the SEC and FINRA during the process, which took over a year and a half to obtain the relief. We're the first to receive this type of relief, which helps showcase our first-mover advantage in tokenized assets.”
So the fund can now trade around the clock. Are there any other benefits for the investor holding it?
Extended trading hours alone is an advancement, but it’s also about what this means tactically for investors. For an investor or stablecoin issuer holding WTGXX over a weekend, under a traditional structure, if they needed liquidity on a Saturday, they would effectively be waiting until Monday’s NAV cycle to access cash. In the 24/7 secondary market, they can sell to the broker-dealer on Saturday and convert to USDC immediately, giving them access to capital in real time.
Another innovation is continuous interest accrual - allocating interest accrued in WTGXX based on the period the investor holds the fund - including intra-day - not just one snapshot a day. That may sound incremental, but it meaningfully changes liquidity dynamics — and on select platforms WTGXX can soon be used as collateral for other trades or financing transactions. So the asset remains economically productive right up until the moment it’s sold.
The implication is simple: capital isn’t trapped inside business-hour windows. It can be monetized the moment liquidity is needed.”
And how does that yield actually reach the investor, given the token can't rebase?
“Because this is a 1940 Act money market fund, WTGXX is designed to maintain a stable value NAV at $1, a key element of a 1940 Act Rule 2a-7 Money Market Fund. Instead of the token price increasing, yield can be distributed as additional fractional fund tokens through a DRIP mechanism. The majority of our clients use DRIP: they simply accumulate more fund tokens over time.
Accrual happens daily, with allocation continuously. Distribution is currently monthly, though we expect to move to daily payouts in the near future. The important distinction is that economic accrual allocation is continuous.”
Let's talk about access. Who can use this today, and how does that broaden?
“At launch, this is available through WisdomTree Connect, our institutional platform, so customers like stablecoin issuers, corporate treasuries, and hedge funds. We have also received interest from non-US investors, which we have onboarded subject to applicable requirements.
The framework is U.S.-regulated, but eligible investors globally can access it once they're properly onboarded. Our broker-dealer facilitates all trades on a principal basis. But the exemptive relief also opens the door for third-party broker-dealers to participate down the line, so this doesn't have to stay within our ecosystem.
Retail access is planned for later this year through WisdomTree Prime, our U.S. retail app.”
For those institutional clients: how does the actual purchase flow work?
“There are three channels. A traditional web portal for straightforward buy and sell. A full suite of APIs for programmatic access. And then the one that's probably most interesting: what we call "on receipt."
You onboard with us, then in our web portal, the customer can scan a QR code to receive a deposit address, one for each of our 15 tokenized funds, and the investor sets up standing instructions. For example, send USDC to the money market fund address, and it triggers an order in our system to buy WTGXX. We send back fund tokens, with timing dependent on whether the investor sought 24/7 availability via the broker-dealer or direct to WTGXX.
Some customers have taken this further and set up automated nightly cash sweeps: stablecoins go to the deposit address on a schedule, and they receive money market fund tokens, and yield accrual is allocated based on the timing of their investment. It's our most crypto-native access point, and it shows where the operational reality of these products is heading.”
You mentioned stablecoin issuers as a key audience. Where else is demand coming from?
“Stablecoin reserve managers are the clearest near-term fit. But we're also seeing strong demand from corporate treasuries, crypto-native hedge funds, broker-dealer platforms, and custodians. The common thread is always the same: yield on idle capital, diversification of assets, and instant liquidity via the broker-dealer.
What's been striking is that many of these customers were asking for this before we had it. Whether it's a stablecoin issuer optimizing reserves, a hedge fund managing overnight cash, or a traditional corporate treasurer exploring cross-border settlement, the use cases are converging around the same requirements. And we’re happy to see this exemptive relief meeting the demands of our clients.”
Speaking of collateral, can the fund be used that way today?
“We're getting there. Peer-to-peer transfers are already live through our identity framework via verified and permissioned wallets, which on EVM chains is drive by a soulbound NFT delivered to the investor's wallet that verifies eligibility, so two WisdomTree Connect customers can transfer directly between each other.
But for collateral posting on external venues, any platform needs to be onboarded first, and we don't have publicly live venues yet. That said, it's one of our most active areas of development.
One thing worth flagging: whether you keep earning yield while using the fund as collateral depends on the venue setup. If the token stays in your wallet and is simply locked, you continue accruing. If ownership transfers to the venue's wallet, yield shifts to them from that moment. It'll vary platform by platform.”
And what about DeFi more broadly? Where does that stand?
“We're part of the Aave Horizon announcement and in active discussions with protocols, including Morpho. Defi integrations have to account for the 1940 Act structure, meaning the fixed NAV, verified and permissioned wallets, and non-rebasing design require careful engineering on the protocol side, so we’re continuing to build towards a solution.
What matters is that DeFi markets demand exactly what we now have: 24/7 liquidity and continuous accrual. Getting this exemption is a foundational piece to be in place for our work in DeFi integrations.”
Where does all of this lead? What's the end goal?
“This exemptive relief is meant to be a first step, not the destination. We're building toward expanding into other products, deeper protocol integrations, and eventually atomic settlement. The vision is an ecosystem where our products have maximum utility and usability across both traditional and crypto-native markets: payments, collateral, DeFi, and cross-border flows.
We already have early versions of some of this, but it is still early innings. Longer term, we see potential for direct payment flows where yield-bearing tokens move between counterparties without the intermediate cash legs at all. But all of that requires ecosystem building around processors, venues, and counterparties willing to handle regulated yield-bearing assets.”
__________________
Industry perspectives: Following our conversation with Hannon, we spoke with three key actors to understand where the market for tokenized money market funds stands today and where it is heading:
The onchain asset management perspective (Centrifuge), on how different tokenized money market fund solutions are increasingly converging toward similar structures.
The treasury management perspective (SAP), on whether corporate treasurers are ready to put tokenized money market funds to work.
The legal perspective (Kaiko), on whether other asset managers could replicate WisdomTree’s approach, and how it compares with Europe.
Jürgen Blumberg is Chief Operating Officer at Centrifuge, a leading infrastructure provider for onchain asset management. Before joining, Blumberg spent 15 years in the ETF industry, notably at Goldman Sachs and BlackRock.
Will every tokenized money market fund end up looking the same?
While today’s tokenized money market fund products each reflect different starting points, they are ultimately converging on the same objective: continuous liquidity. That is the real breakthrough. First-generation tokenized funds still settle once a day at NAV, which is functionally no different from a traditional fund. With 24/7 liquidity, the product finally delivers on what tokenization has always promised.
Zooming out, the fund wrapper itself may become less central in many contexts over time. What we expect instead is a new generation of tokenized wealth management solutions: composable portfolios that combine fund tokens with direct holdings of underlying instruments. In effect, this brings the economics of a Separately Managed Account (SMA) to ticket sizes that were previously impossible.
AI is part of that picture too. AI-driven portfolio management running natively onchain means genuinely personalized strategies can operate even for very small accounts. The cost structures that once confined SMAs to high-net-worth clients no longer apply. What matters instead is superior infrastructure: technology that can bridge blockchains and asset classes while providing access to deep liquidity.
Bernhard Schweiz is Head of SAP Digital Currency Hub at SAP, the €203B software leader powering Fortune 500 operations. His work focuses on integrating stablecoin-based settlement directly into SAP's ERP systems, enabling instant cross-border payments and automated reconciliation without leaving the enterprise infrastructure
Are corporate treasurers already standing in line for tokenized money market funds?
Honestly, not yet. Most corporate treasurers are still working through the basics: what’s a stablecoin, how does it differ from a tokenized deposit, how do I account for it. Europe already has SEPA Instant, which is a highly efficient payment rail.
So the case for moving treasury operations onchain has to be very compelling, and right now the experience isn’t plug-and-play enough. For a large enterprise, adopting this means supplier due diligence on new counterparties, custody decisions, infrastructure integration, treasury policy changes. We’re somewhere around Windows 3.1: the technology works, but you still have to assemble the pieces yourself.
That said, the direction is clear. What makes tokenized money market funds interesting for treasurers is their role as a holding instrument: every stablecoin you receive gets swept into a yield-bearing fund, and when you need to pay, you convert back.
But that only works if I can buy the fund onchain against stablecoins in an atomic transaction, at transaction costs that don’t eat into the yield. If swap fees exceed half a day’s worth of interest, it stops working as a short-term instrument. And if I have to off-ramp to fiat and wait a day for settlement, I’ve lost the entire advantage over a traditional money market fund. The infrastructure to make that seamless still needs to catch up with the product innovation.
Anne-Sophie Cissey is Chief Administrative Officer at Kaiko, a leading provider of digital assets market data, analytics, and indices. She oversees all administrative, legal, compliance, and operational functions.
Can other asset managers follow WisdomTree’s approach, and what’s the situation in Europe?
Yes, but it’s not straightforward. Other asset managers can apply for similar relief under Section 6(c) of the Investment Company Act, and WisdomTree has established valuable precedent. However, each applicant must independently demonstrate compliance capabilities, obtain coordinated SEC and FINRA approvals, and maintain sufficient broker-dealer infrastructure for principal trading and 24/7 settlement. This is a significant undertaking, not a template you can simply file and receive.
In Europe, the path is even less clear. There is no equivalent exemptive relief mechanism. Achieving 24/7 trading at fixed NAV would require engagement with national competent authorities, ESMA coordination, and potentially legislative amendments to UCITS or MiFID II frameworks. Current European tokenized fund offerings still operate on traditional subscription and redemption structures rather than the continuous dealer-intermediated model WisdomTree now uses. For European institutions watching this closely, the regulatory path is more fragmented and likely more time-intensive than in the U.S.
