OpenTrade Raises $1.5M To Tokenize Treasury Bonds, Trade Finance – Ledger Insights
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Today, newly launched startup OpenTrade unveiled a $1.5 million funding round led by Sino Global and including Circle Ventures and others. OpenTrade will launch a DeFi protocol for structured finance products in the second half of the year. This will include liquidity pools of US Treasuries, investment grade certificates and trade finance.
Co-founder and CEO Dave Sutter spent nearly six years at Marco Polo, the blockchain trade finance network that shut down earlier this year. Marco Polo used bank money for funding, while OpenTrade will target non-bank liquidity providers.
It plans to use Circle’s USDC stablecoin for funding and will integrate with procure-to-pay systems, supply chain finance systems and ERP solutions to provide liquidity to businesses. In some ways it is not unlike Marco Polo which was heavily integrated with ERP. The big difference is that companies can sit in the driver’s seat versus relatively slow-moving banks.
Both Chief Commercial Officer Jeff Handler and CTO Tom Niermann had stints at Marco Polo, with Handler most recently at Centre, the governing organization involved in USDC, and Niermann at Meta. The team is rounded out by Michael Harte, former COO/CIO at Barclays and Santander and Michele Biscelgia, former partner at AGFE.
“OpenTrade is a team that has identified real use cases where the utility of USDC and DeFi can drive broader adoption of these technologies across global supply chains and financial providers,” said Wyatt Lonergan, head of Circle Ventures. “We are excited to invest in OpenTrade as they help unlock the utility of USDC in structured and supply chain finance.”
Michele Biscelgia has set up another venture Five Sigma Finance which was spun out of AGFE to manage the “off-chain” operations of OpenTrade. Shareholders include Steve White and AGFE with a minority position. It claims to have $700 million in assets under management.
The other investors in the funding round are Kronos Research, Kyber Ventures, Polygon Ventures and Outlier Ventures.
The Blockchain Competition
Meanwhile, Franklin Templeton recently revealed that the tokenized sovereign money market fund had passed $270 million in assets under management. It started on the Stellar blockchain and is now also available on Polygon. Another startup targeting the tokenization of financial and money market funds is Ondo Finance.
In terms of trade finance, the main public blockchain player has been Centrifuge which was started by the co-founders of the Taulia Supply Chain Finance platform. MakerDAO, the operator of the DAI stablecoin, has invested some of its stablecoin reserves in real-world assets, with Centrifuge a major beneficiary. At the end of 2022, Centrifuge announced $220 million in liquidity, with $150 million from MakerDAO.
Singapore-based Triterras has a less rosy blockchain trade finance history. It uses public blockchain and non-bank liquidity providers, although much of its procurement is conventional. It was involved in a SPAC in 2020 with a market cap that briefly exceeded $1 billion. However, it is now worth just $11 million after a series of controversies, including related party transactions, allegations of short-selling and the resignation of its accountant.
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