Today, digital asset security firm Fireblocks announced the acquisition of BlockFold, a smart contract development and consulting firm specializing in advanced tokenization projects for financial institutions. Fireblocks said the acquisition enriches its tokenization capabilities to provide clients with a complete service layer that includes advisory, token customization, orchestration, and distribution through its network.
With tokenization reinvigorating banking and financial market infrastructure’s decades-old processes and fostering healthy competition, Fireblocks said it will continue collaborating with its tokenization partners Bitbond, Securitize, Securrency, Tokeny, and others to create an open tokenization marketplace for customers that may require support for specific use cases.
BCG projects that the tokenization of financial assets on the blockchain will grow into a $16 trillion market by 2030, representing 10% of all financial assets. Against this backdrop, Fireblocks said it has seen rapid customer demand growth, with a 350% increase in tokenization projects between 2022 and 2023 and 75% of tier-1 financial institutions exploring tokenization via its platform.
“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,” said Michael Shaulov, co-founder and CEO at Fireblocks. “We already speak a common language in understanding these customers’ requirements at an architectural level. Bringing BlockFold’s expertise in-house means that we can better serve tier-1 financial institutions to quickly and seamlessly bring tokenization projects into production and new assets onto the blockchain. In addition, we can continue to innovate, expand our offerings, and tailor our approaches as the market continues to mature and evolve.”
Since its first bank-issued stablecoin in March 2022, Fireblocks has delivered more than 10 stablecoin projects and said it is in active conversations with more than 25 banks globally who are exploring the creation of bank-issued stablecoins or tokenized deposits. Within the next three years, Fireblocks expects the value of tokenized money on the blockchain to reach $450 billion.
In May 2023, Fireblocks enabled the Tel Aviv Stock Exchange and the Israeli Ministry of Finance to tokenize and settle a government bond following a live auction with five domestic and seven global banks. As the sole issuers of Israeli government bonds, both parties now have a credible path to tokenize Israel’s government debt market worth $15 billion annually. Fireblocks expects the value of tokenized bonds on the blockchain to reach $400 billion within three years, targeted to hit $1 trillion by 2028.
“Fireblocks’ acquisition of BlockFold stands to strengthen its tokenization capabilities and bridge the gap between CeFi and DeFi by allowing financial institutions like TASE to build robust and scalable infrastructures and support well-governed digital asset ecosystems,” said Orly Grinfeld, EVP and head of clearing at the Tel Aviv Stock Exchange. “Following the announcement of our five-year strategic plan and the recent groundbreaking and strategic agreement signed with Fireblocks, TASE has been taking significant steps into the digital assets arena, providing institutional-grade digital asset solutions for regulated entities and implementing innovative technologies into traditional markets.
“With Project Eden, an initiative led by TASE that has revolutionized settlement and issuance processes in traditional capital markets, we have witnessed firsthand the results of TASE’s vision and the uniqueness of Fireblocks and BlockFold’s collaboration. This exceptional partnership has enabled us to take another major step in improving traditional markets, making them more accessible, diversified, and efficient. We are excited to continue working with the team and developing new digital asset products and services for the market to propel TASE into the future.”
BlockFold has successfully assisted numerous leading financial institutions with projects that require flexible and customizable solutions, for example, tokenizing money, including tokenized deposits, stablecoins, and central bank digital currencies; tokenizing assets such as carbon credits, real estate, and investment funds; and decentralized market infrastructure. BlockFold’s clients include major institutions such as the Bank of International Settlements Innovation Hub, Swiss National Bank, Banque de France, Singapore’s Ministry of Finance, Tel Aviv Stock Exchange, and National Australia Bank, many of whom are also Fireblocks customers.
“While numerous standards for tokenized assets exist, large financial institutions often require a higher degree of customization of smart contracts as well as orchestration and integration into legacy systems,” said Francois Schonken, senior director of tokenization and business lead at Fireblocks. “We have always appreciated how the Fireblocks team understands this at a fundamental level when we have worked with them. We cannot be more thrilled to be part of this team and unlock even more value from tokenization and decentralized finance to support our customers.”
The BlockFold team is integrating into Fireblocks, with the engineering team joining the Web3 engineering staff and the business consulting team joining the Financial Markets group. In addition to Schonken, co-founder Terence Siganakis has been appointed senior director and head of tokenization products.