Tokenized Fund Adoption Grows but Brings Technology Risks: Moody'sThe adoption of tokenized investment funds is on the rise – but the technology providers have a “limited track record,” contributing to increased risk, a Monday report by credit-rating agency Moody’s Investor Services warned.
Tokenized funds are investment funds whose units are digitally represented with the use of distributed ledger technology (DLT), which powers crypto. Asset or fund tokenization is having a moment as financial institutions worldwide attempt to improve market liquidity, efficiency and transparency. The growing adoption of tokenized funds – mostly fueled by the tokenization of funds that invest in government securities like bonds – signals untapped market potential, according to the report by Moody's DeFi and Digital Assets team.
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