Securitize, Tokenization Firm With BlackRock Ties, to Go Public Through SPAC

Securitize, the platform behind BlackRock’s tokenized money market fund, is set to enter the public market through a merger with a special purpose acquisition company (SPAC). CEO Carlos Domingo revealed in an exclusive interview with CNBC that the fintech firm will merge with Cantor Equity Partners II, Inc., a blank-check entity sponsored by an affiliate of Cantor Fitzgerald, trading under the ticker CEPT. The deal values Securitize’s business at $1.25 billion in pre-money equity.

“Tokenization is the focal point of industry discussions, yet there isn’t a publicly traded entity purely focused on this space,” Domingo stated to CNBC. “We anticipate strong performance in the public market, offering investors a direct avenue to capitalize on the tokenization trend, similar to how Circle allows exposure to stablecoins.”

Tokenization involves registering ownership rights of real-world assets (RWAs), such as stocks, bonds, or commodities, on a blockchain. Proponents, including Robinhood Markets CEO Vlad Tenev and BlackRock CEO Larry Fink, argue that this process enhances transparency and facilitates round-the-clock trading compared to traditional methods. This shift has the potential to unlock trillions of dollars in illiquid assets, creating new investment opportunities and efficiencies in global markets.

Upon completion of the merger, the combined entity, Securitize Corp., will trade on the Nasdaq under the ticker symbol SECZ. Domingo anticipates shares to begin trading as early as January. The company expects to secure $465 million in gross proceeds from the deal, comprising $225 million from private investors, including Borderless Capital and Hanwha Investment, and $240 million held in the SPAC’s trust account, assuming no redemptions.

This strategic move coincides with the surging popularity of tokenized RWAs. The aggregate market value of tokenized U.S. Treasurys has risen to approximately $8.6 billion, marking a substantial increase of over 200% in the past year, according to data from RWA.xyz. This exponential growth underscores the increasing investor appetite for digital assets that offer stable yield and diversification.

The broader RWA tokenization market has expanded by 135% year-over-year, currently valued at $35 billion, signaling a significant shift in how assets are managed and traded. Analysts at Citi project substantial growth in this sector, estimating that the tokenized RWA market could reach nearly $4 trillion by 2030. This projection is driven by the increasing adoption of blockchain technology in traditional finance and the potential for greater efficiency and accessibility in asset management.

Securitize, currently reporting profitability in recent quarters, is well positioned to capitalize on the escalating demand for digital assets. Earlier this year, Circle’s successful debut on the New York Stock Exchange, raising approximately $1.1 billion, further illustrates the growing investor confidence in the digital asset space. Several cryptocurrency exchanges have also ventured into public markets, seeking to expand their reach and access new capital.

Domingo emphasizes that access to public markets will lead to consolidation within the digital asset space. “The crypto industry requires consolidation,” he states. “Publicly traded companies with access to stock capital markets and cash reserves will be better positioned to lead consolidation efforts, rather than being acquired by others.”

Established in 2017, Securitize has been instrumental in facilitating the entry of major financial institutions into the tokenized fund landscape. The company’s platform provides the infrastructure and compliance tools necessary for issuing and managing tokenized assets, making it a critical player in the RWA tokenization market.

In March 2024, BlackRock partnered with Securitize to launch its USD Institutional Digital Liquidity Fund (BUIDL) on the Ethereum blockchain. This fund enables qualified investors to digitally hold U.S. Treasurys and earn yield, demonstrating the real-world applications of tokenization in traditional finance. Securitize has also facilitated the tokenization of over $4 billion in assets through partnerships with firms like Apollo, Hamilton Lane, KKR, and VanEck, highlighting its established position in the market.

According to RWA.xyz, Securitize is the largest tokenization platform, holding a 20% market share in RWA tokenization. This dominance underscores the company’s expertise and its pivotal role in driving the adoption of blockchain technology in the financial industry.

Furthermore, Securitize intends to digitize its own equity, showcasing how the public company process and trading can be conducted on-chain. Domingo envisions a future where all assets and financial operations are integrated into blockchain technology.

“There are $400 trillion in assets worldwide that have the potential to be tokenized,” Domingo concludes. “This represents a significant upgrade to the existing financial infrastructure. Within the next five to ten years, we anticipate that everything will be on-chain, simply because it provides a more efficient and transparent ledger system.” The shift towards on-chain finance promises to reduce friction, increase liquidity, and democratize access to a wider range of investment opportunities.