Crypto Convergence: Blockchain Business Model Shifts Towards Traditional Finance

The digital asset industry is rapidly shifting towards a business model that closely resembles traditional finance. This transformation is evident in the recent moves made by major players such as BlackRock and Tether. BlackRock has launched two tokenized money market products designed to help stablecoin issuers meet reserve requirements under the US GENIUS Act.

The first product tokenizes shares of BlackRock's existing Treasury liquidity strategy on Ethereum, allowing approved investors to transfer ownership onchain while the underlying assets remain invested in cash and short-term US government securities. The second is a new institutional money market vehicle built for digital asset markets that supports multiple blockchains and automatically reinvests income.

Tether, another major player in the industry, generated $1.5 billion in net operating profit during the second quarter, driven primarily by interest earned on its US Treasury holdings and repurchase agreements. Despite a broader stablecoin market contraction, Tether's circulating supply rose by $446 million to $184.6 billion.

The growth of tokenized gold is also notable, with spot trading volume reaching $90.7 billion in Q1 as gold futures rallied above $5,600 per troy ounce. However, the use of tokenized gold in decentralized finance remains limited, with only about 1.5% of its combined market cap used as collateral on Aave v3 and Morpho.