Blockchain technology and tokenization are being used to challenge the traditional ETF model, as Janus Henderson announced a partnership with Anemoy Limited and Centrifuge to create Anemoy’s Liquid Treasury Fund (LTF). This on-chain technology-based fund will provide investors with direct access to short-term U.S. Treasury bills. Nick Cherney, head of innovation at Janus Henderson, stated on CNBC’s “ETF Edge” that this new fund is not necessarily a threat to the ETF industry, but rather a natural evolution towards more efficient and cost-effective investment services delivery to clients. He emphasized the importance of being early in this opportunity, as it represents Janus Henderson’s first tokenized fund.
The Liquid Treasury Fund will have all the traditional features of an ETF, but investors will be able to buy and sell it on a blockchain-based platform. Through this, investors will have exposure to features such as instantaneous 24/7 trading, instantaneous settlement, and total transparency over fund holdings. Cherney believes that these features go beyond what traditional ETFs currently provide, significantly improving the overall investor experience. However, he also acknowledged that this technology could irreversibly change the way business is conducted for some players within the financial ecosystem.
Todd Sohn, ETF and technical strategist at Strategas Securities, expressed concerns about the risks associated with constant trading availability that blockchain-based platforms offer. He stated that the idea of 24/7 trading makes him nervous, especially depending on who is utilizing the technology. Sohn emphasized the need for careful consideration and monitoring of this aspect to prevent potential negative consequences. Despite his reservations, the industry is seeing significant interest and participation from various players, indicating a growing acceptance and integration of blockchain and tokenization technologies within the financial sector.
The integration of blockchain technology and tokenization in the financial industry represents a significant step towards improving efficiency, transparency, and access for investors. This innovation allows for direct access to assets such as short-term U.S. Treasury bills through on-chain technology-based funds like Anemoy’s Liquid Treasury Fund. Although there are concerns about the risks associated with 24/7 trading availability, the overall benefits of instantaneous settlement and total transparency are seen as substantial improvements in the investor experience.
As the financial industry evolves towards blockchain-based platforms and tokenized funds, early adoption and innovation become critical for firms like Janus Henderson. Embracing these technologies can lead to increased efficiency and cost-effectiveness in delivering investment services to clients. While there may be challenges and resistance from some players within the ecosystem, the potential benefits of instantaneous trading and settlement, as well as enhanced transparency, are driving the adoption of these disruptive technologies in the financial sector. It is important for industry participants to carefully navigate and monitor the risks associated with blockchain technology to ensure a smooth transition towards a more advanced and interconnected financial landscape.
