Coinbase’s Bitcoin yield fund transitions to on-chain with Apex’s tokenization initiative.

The Coinbase Bitcoin Yield Fund’s tokenized share class operates on Base as the $3.5 trillion fund services leader Apex implements tokenization throughout its operations.

Coinbase app on a mobile phone screen (appshunter.io/Unsplash/Modified by CoinDesk)

What to know:

• Coinbase Asset Management (CBAM) is introducing a tokenized share class of its Bitcoin Yield Fund on Base in collaboration with $3.5 trillion fund services leader Apex Group.
• This launch highlights a wider initiative by significant asset managers to transition funds onto blockchain platforms to reduce expenses, enhance settlement speed, and broaden distribution.
• Initially available to non-U.S. investors, CBAM has indicated plans to introduce the U.S. variant of its bitcoin yield fund on-chain as well.

Coinbase’s (COIN) asset management division is advancing its bitcoin yield fund on-chain, establishing a tokenized share class of the fund alongside the $3.5 trillion fund administrator Apex Group.

The Coinbase Bitcoin Yield Fund, overseen by Coinbase Asset Management (CBAM), will be accessible to investors on the Base network, which is Coinbase’s blockchain built on Ethereum. Apex acts as the transfer agent, maintaining records consistent with the fund’s net asset value.

This launch arrives as global asset managers are exploring tokenization as the next phase in the evolution of capital markets, enabling bonds, equities, and funds to be tradable on blockchain platforms. Companies such as BlackRock (BLK), Fidelity, and Franklin Templeton have rolled out tokenized funds recently, with the goal of accelerating settlement times, lowering costs, and creating new distribution avenues.

Brett Tejpaul, head of Coinbase Institutional, stated that the firm’s asset management business has already attracted significant institutional capital, with many investors holding core positions in bitcoin and ether.

“Gradually, we are seeing new capital entering the space that seeks the ability to achieve compounded returns, so their investment is not solely reliant on the appreciation of bitcoin; while waiting for its price to increase, they can also earn yield,” he explained to CoinDesk.

“The bitcoin yield fund enables this by engaging in activities such as selling call options or partaking in lending agreements.”

Tokenized assets represent a potentially multi-trillion-dollar market, with projections ranging from McKinsey’s estimate of $2 trillion by 2030 to BCG and Ripple’s target of $18.9 trillion by 2033.

Apex, a major player in the fund service sector managing $3.5 trillion in assets, is increasingly adopting tokenization as well. It acquired Tokeny last year, a specialist that facilitated the tokenization of over $32 billion in assets. Apex also announced plans to tokenize $100 billion in funds utilizing the T-REX Ledger by June 2027 to oversee ownership and compliance across various blockchains.

For the Coinbase Bitcoin Yield Fund, the tokenized share class employs the ERC-3643 token standard, which incorporates investor verifications directly into the token. Only authorized investors can hold or transfer the asset, with identity linked to each wallet through a specific onboarding process.

This arrangement replaces manual compliance checks with automated regulations. If a wallet is not authorized, the transaction will be unsuccessful. This could lessen the barriers for institutional investors when accessing and shifting fund positions.

The fund is accessible to non-U.S. investors, but CBAM indicated intentions to develop a tokenized share class for the U.S. version of the fund as well.