Asset manager WisdomTree unveiled its stablecoin strategy alongside publicizing the existence of its Stellar-based stablecoin USDW, which isn’t new, but has been low key until now. The reason for its low profile is the stablecoin has only been available to WisdomTree Prime users. When it launched two years ago, WisdomTree Prime was a groundbreaking retail focused app enabling access to Bitcoin, Ether, tokenized gold and WisdomTree digital funds. It planned a stablecoin, but waited until it received a New York Trust Charter in 2024.
Given its successful money market fund WTGXX (AUM $480m), WisdomTree positions WTGXX for yield and USDW for payments. WTGXX is just one of its 13 tokenized funds. There are multiple prongs to its stablecoin strategy. The first is USDW (soon to be rebranded WUSD), which is currently used for paying fund dividends. It plans to expand the availability to different blockchains and use cases. That includes enabling the movement of funds between WTGXX, equities, fixed income, asset allocation strategies and others.Â
Other firms have launched similar walled garden stablecoins but logged transactions internally rather than on the blockchain, making them pseudo-stablecoins rather than true blockchain assets. WisdomTree’s is a real stablecoin, even if its market cap is only just over $1 million. Having its own stablecoin doesn’t mean it will shun other stablecoins. In fact, it’s doing the opposite. This month it is adding support for retail users to be able to deposit and withdraw into WisdomTree Prime using USDC and PYUSD. So far it has enabled $200 million in institutional flows from USDC into its tokenized funds.Â
Beyond direct retail and institutional use, WisdomTree sees an opportunity in serving other stablecoin issuers. In his blog post, Will Peck, Head of WisdomTree Digital Assets, highlighted that WTGXX qualifies as reserves for stablecoin purposes both in New York and under the GENIUS Act. Notably, two wallet addresses account for $466 million of the WTGXX issuance.
Hence, WisdomTree is actively adapting the product to meet needs of these types of blockchain native clients. That includes 24/7 interest accrual, extended time windows for fund issuance and peer-to-peer transferability. Peck says the firm is working on 24/7/365 trading of the tokenized fund against stablecoins. It’s not just stablecoin issuers that desire these features. Many crypto firms invest their treasury assets in such funds, and other digital asset managers also invest in WTGXX – we believe Ondo Finance is one of them.
