Corporate clients of stablecoin services startup Stable Sea will now be able to deploy their idle operating cash in WisdomTree’s tokenized money market funds, earning yield. 

Stable Sea is a stablecoin management firm that started out by helping businesses onramp into crypto, move stablecoins around the world, and cash out into dozens of local currencies. On Wednesday, through a tie-up with WisdomTree, the firm is adding corporate access to yield-bearing capital markets products, like WisdomTree's WTGXX fund. 

According to Will Peck, head of digital assets at WisdomTree, this represents a first-of-its-kind collaboration in that its flagship tokenized fund will be integrated directly into a third-party payments and treasury management platform. Stable Sea users will be able to sweep their stablecoin balances into onchain products to earn above savings account rates, and swap back as liquidity is needed.

“We want to be the default for 'money at rest' within the onchain space,” Peck told The Block in a call. “So if you've got money at rest, we want that to be sitting in our tokenized money market fund earning the prevailing interest rate at the time and then make it seamless for you to swap into the stable of your choice so that you can immediately move to 'money in motion.'”

The WisdomTree Government Money Market Digital Fund (WTGXX) is a tokenized fund that invests primarily in U.S. government bonds to provide holders access to yield while maintaining a stable $1 net asset value per share. With about $857 million in managed assets, it is the sixth-largest fund of its kind, according to RWA.xyz.

Rapid tokenization growth

Stable Sea’s integration comes amid rapid growth in the tokenization sector, particularly for onchain Treasuries products. There is now $15.07 billion worth of tokenized Treasuries onchain across 76 assets, three of which — Circle’s USYC, BlackRock’s BUIDL, and Ondo’s U.S. Dollar Yield funds — manage over $2 billion in assets. 

Peck noted demand for stable yield-bearing onchain funds spiked following the passage of the GENIUS Act last summer. The deal with Stable Sea is part of WisdomTree’s strategy to move WTGXX into real-world corporate use cases beyond DeFi, in part by providing a seamless redemption process for Stable Sea users to convert into stablecoins for global payments. 

Notably, Stable Sea co-founder and CEO Tanner Taddeo told The Block that 90% of its client base is not crypto native, including at least one painting company and a manufacturer based in the U.S., among other retail brands. The firm also provides OTC trading support and the ability to buy bitcoin. 

“There's around $5 trillion in cash that's sitting in business accounts that yield under 2% APY,” Peck said. “If you can start to move some of that volume onchain and create a frictionless experience for getting that money into and out of a money market fund for payments, et cetera, you should see the ecosystem start to grow nicely here in the coming years.”

Tokenized Treasury funds are currently averaging around a 3.05% seven-day APY across the sector, according to RWA.xyz. WTGXX, which is offering 3.5%, according to the same site, offers continuous dividend accrual, with the fund "forward smoothing" the income earned by its underlying assets over the full 24 hours, Peck said. 

Peck noted it took about a year for this tie-up to go to market, after an initial introduction last year. WisdomTree is an LP in a venture fund that has invested in Stable Sea, which was founded by former Block employees. 

“These are businesses that we would never really talk to,” Peck said, referring to Stable Sea’s client base of small and medium-sized businesses. “We've got a product that's got real product market fit for them.”

“It's starting small, for sure, but I think it's something that's really exciting and encouraging for the space,” Peck added.