Moody's rates first fund to use Standard Chartered unit's tokenization platform

Moody's has rated the first fund to use Standard Chartered's SC Ventures' tokenization platform Libeara.

SGD Delta Fund, a tokenized Singapore-dollar government bond fund, received an AA rating, despite the credit quality of the underlying assets being AAA.

Moody's said it expects the credit quality of the fund's portfolio to be in line with an AAA rating. However, it assigned the fund an AA rating, "reflecting the risks associated with the fund manager's lack of track record in managing unit trusts with similar strategies."

Tokenized fund issued on a public blockchain

The SGD Delta Fund is issued by Singapore’s FundBridge Capital, which is the first fund manager to use the Libeara tokenization platform.

FundBridge Capital will issue the tokenized fund units on the Ethereum and Stellar blockchains.

The fund will primarily invest in high-quality Singapore government securities. "The Fund will issue tokenized units which are digital representation of units in the fund registered on a blockchain. SGD Delta Fund will issue its units in tokenized form on public blockchains, Ethereum ETH +0.17% and Stellar," the Moody's rating report said.

The report added that tokenization on a public blockchain, "will increase transparency and enable whitelisted investors to exchange tokenized units between themselves."

Interest in tokenization increasing

SC Ventures launched the Libeara tokenization platform in November. Libeara then partnered with FundBridge Capital to help create the tokenized Singapore-dollar government bond fund for accredited investors.

The new tokenization platform established by the investment and innovation arm of Standard Chartered Bank had previously undertaken proof-of-concept projects as a finalist in the Monetary Authority of Singapore's Global Retail CBDC Challenge.