WisdomTree achieves first-ever all-weather settlement of tokenized funds, SEC exemption sets a precedent

Global asset management firm WisdomTree announces the official launch of its U.S. Treasury Money Market Digital Fund (WTGXX), now offering 24/7 trading and real-time settlement capabilities. This makes it the first registered tokenized mutual fund share permitted under U.S. regulatory framework to conduct round-the-clock trading using a dealer-principal liquidity model. The rollout received an exemption approval from the U.S. Securities and Exchange Commission (SEC).

Breaking T+1 Limit: The Significance of 24/7 Instant Settlement

Traditional mutual funds are limited by T+1 settlement cycles, requiring investors to wait one business day after a trade to complete settlement. WTGXX’s instant settlement mechanism eliminates this delay, allowing investors to buy income-generating assets immediately and reducing the “cash drag” effect caused by idle cash waiting for settlement.

Will Peck, Head of Digital Assets at WisdomTree, stated: “Instant settlement has always been one of the core advantages of blockchain and RWA (Real-World Asset) tokenization technology. We are very grateful for the proactive cooperation from the SEC and FINRA, which granted the necessary exemptions and regulatory approvals to bring this innovation to market.”

The feature launch includes the following innovations:

24/7 Trading: Breaking traditional market hours to enable continuous liquidity

Real-Time Settlement: Using USDC stablecoin as the initial settlement medium, eliminating the T+1 waiting period

Ongoing Dividend Mechanism: Tracking intra-day holdings via blockchain timestamps and proportionally distributing daily income. Even if tokens are transferred between wallets during the day, holders still receive corresponding interest distributions

Technical Architecture: Dealer-Principal Model and Primary Market Coexistence

WTGXX’s round-the-clock trading does not occur on an exchange or trading venue but employs a dealer-principal model, where WisdomTree Securities conducts bilateral trades with investors based on its own balance sheet. This design enables 24/7 trading while maintaining the original primary market subscription and redemption structure of the fund.

The core logic is that trades are settled through broker inventories rather than directly with the fund, avoiding changes to the fund’s underlying operations. Coupled with existing P2P token transfer capabilities, the WisdomTree Connect™ platform supports frictionless, round-the-clock asset movement across different wallets, accounts, and counterparties.

Market Access and Future Outlook

Initially, this functionality is open to institutional investors via WisdomTree Connect™, with the first participating dealer being WisdomTree Securities. Over time, other qualified non-affiliated brokers will be able to apply, further expanding market liquidity sources.

Looking ahead, WisdomTree plans to extend the round-the-clock trading and real-time settlement features to retail investors through WisdomTree Prime® and other channels. WTGXX has previously helped crypto-native institutions manage on-chain funds more efficiently, eliminating the need for off-chain trading to access income assets.

Frequently Asked Questions

How is WisdomTree WTGXX’s 24/7 trading technically achieved?

WTGXX uses a dealer-principal liquidity model, with trades settled through WisdomTree Securities’ own inventory rather than matching on an exchange or directly by the fund. This approach bypasses the traditional fund’s daily settlement cycle and uses USDC stablecoin as the settlement medium to enable real-time crediting.

What is the broader significance of this SEC exemption for the industry?

Under the 1940 Investment Company Act, registered funds have never been permitted to conduct secondary market tokenized share trading in a 24/7 manner. This SEC exemption is the most significant regulatory breakthrough since ETF structural innovations, providing a regulatory pathway for future tokenization across various asset classes.

When will retail investors be able to access WTGXX’s 24/7 trading?

Currently, the 24/7 trading feature via WisdomTree Connect™ is only available to institutional investors. WisdomTree indicates that future expansion to retail investors through WisdomTree Prime® and other channels is possible, but specific timelines have not yet been announced.