GSR's Baehr says tokenized fixed income could play key role in institutional collateral

GSR Managing Director of Asset Management Andy Baehr said that tokenization has clear institutional use cases, such as tokenizing short-term fixed-income products for collateral.

In an interview with The Block's Kelvin Sparks at the Wyoming Blockchain Symposium 2026, Baehr said that GSR is actively "building" around tokenization opportunities. He said that one straightforward use case involves tokenizing short-term fixed-income products.

Institutions posting collateral for futures or over-the-counter trades could put that collateral to work in short-term Treasuries, according to Baehr. "It's not really retail-y, but it's very scalable," Baehr said, adding that it's an important case in institutional plumbing.

Baehr also said that the idea of mass tokenization of equities is "exciting," as that could enable 24/7 trading and allow investors to trade equities on the same platforms they already use for digital assets.

"There's a lot of expectation that people are going to lunge towards trading tokenized equities," Baehr said, although he pointed out that the actual scale of adoption remains to be seen.

GSR has doubled down on its tokenization strategy. In April, it made a lead investment in Libeara, an SC Ventures-backed tokenization platform. That followed GSR's acquisition of Autonomous and Architech in March as it expanded into the token advisory trade.

Since 2013, GSR has operated as a crypto market maker and OTC dealer, and it plans to support liquidity as tokenized-equities and related flows emerge, according to Baehr.

Counterparty risks in lending

Meanwhile, lending remains critical to the industry but is still developing. "As lending develops, the idea of counterparty risk and analyzing counterparty risks is going to be important," said Baehr.

Compared with traditional prime brokerage, Baehr said crypto lending faces challenges, including the fragmented, firm-by-firm nature of liquidity pools and the lack of a clear term structure of interest rates.

"I still think it's really expensive right now to borrow dollars against native tokens," said Baehr. "This is a problem that we're trying to solve on the asset management side."