- Centrifuge, Coinbase, and Morpho have joined forces to create a new credit market tailored for institutional investors, utilizing tokenized U.S. Treasuries as collateral.
- The partnership introduces Coinbase verifications to ensure a secure, permission-based lending environment.
In an unprecedented move within the cryptocurrency landscape, Centrifuge—a startup renowned for its blockchain-based tokenized real-world assets (RWA)—has aligned with Coinbase and Morpho to launch a novel credit market. This initiative is designed to provide institutional investors with immediate liquidity through tokens secured by U.S. Treasuries.
Unleashing the Power of Tokenized Assets
The newly devised credit market operates on Coinbase‘s Ethereum-based Base network. Here, tokenized U.S. Treasuries, such as the Anemoy Liquid Treasury Fund (LTF) by Centrifuge and the US Yield Coin (USYC) from Hashnote, serve as the primary form of collateral. This innovative approach not only stabilizes the lending process but also enhances security through Morpho’s meticulously crafted system.
Centrifuge initially explored the potential of tokenizing real-world assets on the blockchain back in 2017. While promising, these assets initially faced significant liquidity challenges. Over time, the inclusion of assets like short-term Treasury bonds has invigorated the credit market, according to Lucas Vogelsang, co-founder of Centrifuge. He elaborated that the market, in collaboration with Morpho, is now poised to extend even greater benefits to tokenized assets.
Vogelsang highlighted the practicality of this market, stating,
“If you own a Treasury bond and need liquidity for a few hours or days, you can instantly access it on this market without undergoing a lengthy and costly process to reclaim your tokenized asset.”
A New Era in Credit Markets
This collaboration also marks the first introduction of Coinbase verifications in the approved credit market arena. This innovative step enhances security by enabling Coinbase users to verify their Know Your Customer (KYC) information through the Ethereum Attestation Standard. Such advancements signify a significant leap toward integrating blockchain solutions with traditional financial instruments.
The synergy between Centrifuge, Coinbase, and Morpho accelerates the digitalization of traditional financial instruments, increasing the popularity of tokenized assets within the financial sector. Investors now have the opportunity to craft a more flexible and efficient financial structure by accessing instant liquidity through blockchain technology.
Managed by Morpho Vaults, Steakhouse Financial, and Re7 Labs, this new credit market heralds a significant transformation in the financial industry, paving the way for more widespread adoption and innovation in blockchain-integrated financial operations.