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Custody tech firm Fireblocks beefs up tokenisation abilities with US$10m acquisition

The move provides a way for the Israeli exchange and finance ministry to tokenise Israel’s government debt market, which is worth US$15 billion annually.

The value of tokenised bonds on the blockchain is projected to reach US$400 billion in the next three years, and is expected to hit US$1 trillion by 2028.

The latest acquisition is the second one for Fireblocks since it was founded in 2018.

In February 2022, Fireblocks acquired stablecoin and Israeli digital asset payments technology platform First Digital after completing a US$550 million Series E funding round that raised Fireblocks’ valuation to US$8 billion.

The 17-strong BlockFold team of engineers, developers and consultants will be integrated into Fireblocks following the deal.

Mr Francois Schonken, formerly BlockFold’s chief executive and co-founder, has been appointed Fireblocks’ senior director for the tokenisation business.

BlockFold’s co-founder Terence Siganakis has been appointed Fireblocks’ senior director and head of tokenisation products.

SINGAPORE – Custody technology provider Fireblocks, whose regional headquarters is in Singapore, has acquired a Melbourne-based smart contract development firm for US$10 million, as it moves to build up its offerings.

The purchase of BlockFold will beef up Fireblocks’ tokenisation capabilities to provide services like advisory, token customisation, orchestration, and distribution through its network.

BlockFold has helped entities – including Singapore’s Ministry of Finance, Bank of International Settlements and the Tel Aviv Stock Exchange – with tokenisation of deposits, issuance of stablecoins and central bank digital currencies (CBDC), as well as tokenisation of real world assets such as carbon credits, real estate and investment funds.

Mr Michael Shaulov, co-founder and chief executive at Fireblocks, told The Straits Times: “While we began with a transfer and custody technology solution, the vision for me and my co-founders has always been to solve for the secure safekeeping and movement of digital assets, with the view that the crypto-rails will service mainstream financial activity.”

He said Fireblocks’ customers go beyond trading and speculation.

They want to be able to go directly from minting to storing to transferring their digital assets and having total control over the full lifecycle of their digital assets, noted Mr Shaulov.

“This acquisition is a natural move for us and allows us to enable customers to bring traditional assets onto the blockchain and develop a decentralised market infrastructure and business models,” he added.

New York-based Fireblocks said it would continue to work with tokenisation partners Bitbond, Securitize, Securrency, Tokeny, and others “to create an open tokenisation marketplace for customers”.

The demand for tokenisation projects went up 350 per cent between 2022 and 2023, the firm said, adding that 75 per cent of its top-tier clients are exploring tokenisation.

It said it is in active conversations with more than 25 banks globally that are exploring the creation of bank-issued stablecoins or tokenised deposits. A stablecoin is a token that is commonly pegged to fiat such as the United States dollar or euro, on a one-to-one basis.

In the next three years, Fireblocks expects the value of tokenised money on the blockchain to reach US$450 billion.

So far, the custody technology provider said it has delivered more than 10 stablecoin projects since its first bank-issued stablecoin for ANZ Bank in March 2022.

In May 2023, Fireblocks enabled the Tel Aviv Stock Exchange and the Israeli Ministry of Finance to tokenise and settle a government bond following a live auction with five domestic and seven global banks.