Fireblocks Bolsters Tokenisation Services through BlockFold Acquisition

In a strategic move set to redefine the landscape of financial tokenisation, Fireblocks, the US-based cryptocurrency custody company, has announced its acquisition of BlockFold, a smart contract development and consulting firm known for its prowess in advanced tokenisation projects tailored for the banking and financial sector. The acquisition, valued at approximately $10 million, heralds a new era for Fireblocks, enhancing its ability to cater to the needs of the industry’s largest banks and financial institutions.

The Fireblocks-BlockFold synergy represents a significant milestone in tokenisation, as it equips Fireblocks with an array of capabilities, including advisory services, token customisation, orchestration, and distribution through the robust Fireblocks Network. This development is in sync with the ongoing transformation of traditional banking and financial market infrastructures, as tokenisation emerges as a catalyst for innovation and competition.

The tokenisation trend has been gaining traction, driven by its potential to streamline age-old financial processes and foster healthy competition. According to Boston Consulting Group (BCG), the tokenisation of financial assets on the blockchain is projected to surge to a staggering $16 trillion market by 2030, constituting 10% of all financial assets. Against this backdrop, Fireblocks has witnessed an unprecedented surge in customer demand, with a remarkable 350% increase in tokenisation projects between 2022 and 2023. Moreover, 75% of tier-1 financial institutions actively explore tokenisation through Fireblocks’ platform.

Michael Shaulov, Co-founder & CEO at Fireblocks, expressed his enthusiasm for the acquisition, saying, “BlockFold’s expertise fills an important gap in the market, tailoring bespoke solutions for some of our most sophisticated customers and prospects in the banking and financial institutions space.” This sentiment underlines Fireblocks’ commitment to providing top-tier services to tier-1 financial institutions, enabling them to swiftly and seamlessly bring tokenisation projects into production while continually innovating to adapt to the evolving market.

Fireblocks’ journey into tokenisation began with its landmark creation of the first bank-issued stablecoin for ANZ in March 2022. Since then, Fireblocks has notched more than ten stablecoin projects and is currently in active discussions with over 25 banks worldwide, keen on exploring bank-issued stablecoins and tokenised deposits. The company’s ambitious projection foresees the value of tokenised money on the blockchain reaching a staggering $350 billion within the next three years.

May 2023 marked another milestone for Fireblocks. It enabled the Tel Aviv Stock Exchange (TASE) and the Israeli Ministry of Finance to tokenise and settle a government bond following a live auction involving five domestic and seven global banks. This historic achievement positioned both TASE and the Ministry of Finance as pioneers in the tokenisation of Israel’s government debt market, which boasts an annual value of $15 billion. Fireblocks is poised to play a pivotal role in propelling the importance of tokenised bonds on the blockchain to $1 trillion by 2028.

Orly Grinfeld, EVP, Head of Clearing at Tel Aviv Stock Exchange, lauded Fireblocks and BlockFold for their instrumental role in Project Eden, an initiative to revolutionise the settlement and issuance process in traditional capital markets. She emphasised how BlockFold’s intelligent contracts and Fireblocks’ interoperability layer paved the way for a groundbreaking collaboration between the private and public sectors, leveraging blockchain, smart contracts, and tokenisation.

BlockFold has a stellar track record of assisting prominent financial institutions with diverse tokenisation projects, spanning the tokenisation of money (including tokenised deposits and stablecoins), assets such as carbon credits, real estate, and investment funds, and developing decentralised market infrastructure. Noteworthy clients in BlockFold’s portfolio include the Bank of International Settlements, Swiss National Bank, Banque de France, Singapore’s Ministry of Finance, Tel Aviv Stock Exchange, National Australia Bank, and ANZ Bank—many of which are also Fireblocks’ clients. This synergy of clientele positions Fireblocks favourably to deliver immediate value to clients and leverage synergies for its ongoing research and development efforts.

Francois Schonken, Senior Director and tokenisation Business Lead at Fireblocks, highlighted that while various standards exist for tokenised assets, large financial institutions often require more customisation, intelligent contract integration, and orchestration within legacy systems. He expressed his excitement about joining the Fireblocks team and the potential to unlock even more value in tokenisation and decentralised finance.

With the acquisition complete, the BlockFold team is seamlessly integrating into Fireblocks. The engineering team is joining the Web3 engineering staff, while the business consulting team is integrating into the Financial Markets group. Notably, co-founder Terence Siganakis has been appointed Senior Director and head of Tokenization Products, reflecting the commitment to driving innovation and excellence in tokenisation.

In summary, Fireblocks’ acquisition of BlockFold signals a significant development in financial tokenisation, positioning Fireblocks as a powerhouse in providing tailored solutions to the banking and financial institutions sector. With a projected $16 trillion market horizon, Fireblocks is well-positioned to lead the charge, bridging the gap between traditional and decentralised finance and facilitating the creation of robust digital asset ecosystems for institutions worldwide. This partnership promises to enhance accessibility, diversity, and efficiency in conventional markets while advancing digital asset products and services.