SEC Exemptive Relief Opens a New Chapter for Tokenized Fund Liquidity
(Source: WisdomTreeNews)
WisdomTree, headquartered in New York, has announced that its WisdomTree Treasury Money Market Digital Fund (WTGXX) now supports 24/7 trading and real-time settlement.
This milestone was enabled by the company securing exemptive relief from the U.S. Securities and Exchange Commission (SEC), allowing registered tokenized mutual funds governed by the Investment Company Act of 1940 to operate continuous trading and instant clearing under the U.S. regulatory framework for the first time. Unlike the traditional T+1 settlement model common in legacy markets, this innovation lets investors access yield-generating assets instantly, minimizing cash drag and boosting the efficiency and liquidity of tokenized assets.
Trading Model: Broker-Dealer Proprietary Inventory Drives Liquidity
Alongside SEC exemptive relief, WisdomTree Securities, Inc.—a WisdomTree subsidiary—has received FINRA approval to expand its broker-dealer operations, enabling principal-based trading of registered fund shares.
The core structure includes:
- Liquidity provided through broker-dealer inventory rather than direct fund subscriptions or redemptions
- Preserving the existing primary market structure
- Utilizing a bilateral trading model
- Deploying USDC as the stablecoin settlement tool in the initial phase
Currently, WisdomTree Securities is the participating broker-dealer. In the future, other unaffiliated broker-dealers may join if they meet eligibility requirements.
Real-Time Settlement and Blockchain-Based Yield Distribution
In addition to 24/7 trading, WisdomTree has introduced a continuous dividend accrual mechanism.
Key features include:
- Recording holding duration via blockchain timestamps
- Allowing token transfers between different wallets within the same day
- Allocating daily yield proportionally based on actual holding time
This approach allows holders conducting peer-to-peer transfers to earn corresponding interest income, further enhancing the intraday utility of on-chain assets while maintaining the fund’s original investment process.
Institutional Services via WisdomTree Connect
(Source: WisdomTree Connect)
This 24/7 capability will be available to institutional investors through WisdomTree Connect™. In the future, retail investors may also gain access via channels such as WisdomTree Prime®. WTGXX has already been adopted by some crypto-native institutions for on-chain cash management and yield allocation, reducing the need to move assets off-chain to pursue returns.
The Significance of Regulatory Innovation
WisdomTree notes that structural regulatory breakthroughs of this kind have been rare since the introduction of ETFs. With SEC exemptive relief and FINRA approval, the company can reshape capital market infrastructure within a compliant framework.
Will Peck, Head of Digital Assets, emphasized that real-time settlement has always been a core promise of blockchain and RWA tokenization. This launch delivers a substantial upgrade to the investment experience and demonstrates blockchain’s potential as the foundation for next-generation capital markets.
Blockchain and Potential Risks
Blockchain is an open and decentralized ledger technology used to verifiably record transactions. Tokenization refers to digitally representing fund shares on the blockchain. However, several risks should be considered, including:
- Blockchain technology is still relatively new and lightly regulated
- Systems may face fraud or collusion risks
- Transaction congestion may cause delays
- Network fee volatility
- Third-party service providers may be subject to cybersecurity attacks
Investing in WTGXX also involves principal loss risk. While the fund aims to maintain a $1 per share value, this is not guaranteed. It is not a bank deposit and is not insured by the FDIC or any government agency.
Conclusion
Through regulatory approval and broker-dealer architecture innovation, WisdomTree has enabled tokenized money market funds to achieve 24/7 trading and real-time settlement within the U.S. regulatory framework for the first time. This not only shortens settlement times but also ushers yield-generating assets into the era of round-the-clock liquidity, marking a new milestone in the foundational infrastructure of the tokenized securities market.
