Fireblocks, the leading digital asset platform trusted by global financial institutions, has announced its acquisition of BlockFold, a prominent smart contract development and consulting firm specializing in advanced tokenization projects for financial institutions. This strategic partnership significantly enriches Fireblocks’ tokenization capabilities, allowing the company to offer a comprehensive service layer, including advisory, token customization, orchestration, and distribution through the Fireblocks Network.
As the financial sector experiences a radical transformation with tokenization reshaping traditional processes, this acquisition positions Fireblocks as a robust player in the evolving landscape. Working closely with its existing partners like Bitbond, Securitize, Securrency, and Tokeny, Fireblocks aims to establish an open tokenization marketplace, catering to clients with diverse and specific use cases.
Growing Demand for Tokenization
Blockchain analysts BCG project that the tokenization of financial assets on the blockchain will burgeon into a $16 trillion market by 2030, constituting 10% of all financial assets. Fireblocks has been witnessing a surge in demand, with a remarkable 350% increase in tokenization projects between 2022 and 2023. Furthermore, 75% of tier-1 financial institutions are actively exploring tokenization via the Fireblocks platform.
Michael Shaulov, Co-founder & CEO at Fireblocks, emphasized the strategic importance of this acquisition. “BlockFold’s expertise fills an important gap in the market, tailoring bespoke solutions for some of our most sophisticated customers in the banking and financial institutions space,” said Shaulov. He highlighted that bringing BlockFold’s expertise in-house allows Fireblocks to better serve financial institutions and innovate as the market matures.
Tokenizing Bonds and Stablecoins
Fireblocks has made significant strides in the tokenization realm. Since launching its first bank-issued stablecoin in March 2022, Fireblocks has executed more than 10 stablecoin projects and is in discussions with over 25 banks globally exploring bank-issued stablecoins or tokenized deposits. In May 2023, Fireblocks facilitated the Tel Aviv Stock Exchange and the Israeli Ministry of Finance to tokenize and settle a government bond after a live auction involving domestic and global banks. This development has opened the door to tokenize Israel’s government debt market, valued at $15 billion annually. Fireblocks anticipates that the value of tokenized bonds on the blockchain will reach $400 billion within the next three years, with a target of $1 trillion by 2028.
Empowering Financial Institutions
Fireblocks’ acquisition of BlockFold solidifies its position as a pioneer in the tokenization arena, bridging the gap between Centralized Finance (CeFi) and Decentralized Finance (DeFi). This collaboration enables financial institutions to build robust and scalable infrastructures, supporting well-governed digital asset ecosystems.
Orly Grinfeld, EVP, Head of Clearing at the Tel Aviv Stock Exchange, lauded the partnership, emphasizing its role in making traditional markets more accessible, diversified, and efficient. Grinfeld highlighted the success of this collaboration in implementing innovative technologies into traditional markets, paving the way for future digital asset products and services.
“While numerous standards for tokenized assets exist, large financial institutions often require a higher degree of customization of smart contracts as well as orchestration and integration into legacy systems,” said Francois Schonken, newly appointed Senior Director, Tokenization Business Lead at Fireblocks. “We have always appreciated the way in which the Fireblocks team understands this at a fundamental level when we have worked with them in the past. We cannot be more thrilled to be part of this team and to unlock even more value out of tokenization and decentralized finance to support our customers.”
With BlockFold seamlessly integrated into Fireblocks, the company is poised to continue leading the charge in transforming the financial sector through advanced tokenization solutions.
Photo by Red Morley Hewitt on Unsplash
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