Cap Provides Protected Yield to WisdomTree Users

Cap allows WisdomTree users to access protected yield via the WTGXX tokenized government money market fund.

Today, the tokenized dollar landscape is more mature than most people realize. Many are familiar with stablecoins, which after over a decade in existence finally received legitimacy and recognition via the GENIUS Act in July 2025. But there is another similar product that has attracted billions in deposits: tokenized money market funds (MMFs). Although they have existed since 2021 and have grown to $10.6 billion, their utility onchain has remained low. This is due to several factors, such as the permissioned nature of MMFs and unfeasibility of leveraging them on P2P lending markets.

Cap, a covered credit platform powered by financial guarantees, has the ability to breathe new life into MMFs. Since November 2025, Cap connects WisdomTree's billions in deposits to its insured yield product by allowing the WTGXX money market fund to be used as a deposit asset at Cap. Regulated financial institutions can then compete for access to these WTGXX tokens in order to generate incremental yield for depositors.

What Are Money Market Funds? What Makes Them Different From Stablecoins?

MMFs have been around since the passage of the Investment Company Act of 1940 and are low-risk, dollar-equivalent mutual funds regulated by the SEC. The core premise of an MMF is capital preservation and liquidity. A share in these MMF is always $1, and yield is sourced from US Treasuries. The U.S. MMF market exceeds $6 trillion, making it the institutional go-to destination for low-risk yield on dollars. Because they are regulated by the SEC under Rule 2a-7, they have strict rules to abide by: weighted average maturity must stay below 60 days, minimum levels of daily and weekly liquid assets must be maintained, and funds undergo daily stress testing.

It was exactly the strict constraints of money markets that made them easier to tokenize, and there are a number of reasons for this. First, because their NAV is stable at $1, setting up an oracle is straightforward and low risk. Second, the transfer mechanics are simple since they don't require physical certificates. Moving from "entries in a transfer agent's database" to "entries on a blockchain that the transfer agent reconciles" is a smaller leap than tokenizing something like real estate or private equity, where ownership transfers involve extensive legal documentation. Furthermore, yield accrual is easily programmable into smart contracts. When Franklin Templeton applied for the first tokenized MMF (FOBXX) in 2019, they were merely asking to use blockchain as a record keeping mechanism for an existing product. The blockchain is just a secondary ledger that gets reconciled daily with the official transfer agent records.

Essentially, MMFs were the lowest regulatory and technical friction entry point for tokenizing a regulated financial product. The product was already digital (book-entry), already stable ($1 NAV), already well-regulated (Rule 2a-7, '40 Act), and the blockchain layer could be framed as an infrastructure upgrade rather than a novel financial instrument.

What Is WisdomTree? What Is WTGXX?

WisdomTree (NYSE: WT) is a global asset manager that has built its reputation over two decades, primarily as an ETF sponsor. With a track record of innovation, WisdomTree pioneered different kinds of ETFs including dividend-weighted and commodity ETFs. Today, WisdomTree has grown to encompass ~$149 billion in global AUM, with record ETP and tokenized AUM of $144.5 billion at year-end 2025 growing to $160.8 billion by late January 2026.

But what sets WisdomTree apart from other traditional asset managers exploring blockchain is the depth of their commitment. They became their own blockchain-enabled transfer agent, a strategic decision to control the full pipeline from issuance to investor experience. They built 13 SEC-registered tokenized funds, the largest suite in the market spanning money market, equities, fixed income, and asset allocation. And they launched their own stablecoin, USDW, creating a two-product stack where USDW handles transactions and WTGXX handles yield.

WisdomTree's digital asset business is one of the fastest-growing parts of their book, increasing 25x from $30M to $770M in AUM during 2025 alone. This growth has been driven by WTGXX, their Treasury Money Market Digital Fund, which is currently live on Ethereum, Stellar, Avalanche, Arbitrum, Base, Optimism, and Plume. WTGXX settles same-day orders, requires only a $1 minimum investment, charges a 0.25% expense ratio, and generates (as of this writing) roughly 3.5% yield. To date, WisdomTree has processed over $200M in institutional USDC subscriptions into its tokenized funds.

Yet WTGXX is just one part of the equation, what is a product without distribution? Through WisdomTree Connect for institutions and WisdomTree Prime for retail, WTGXX is able to reach WisdomTree's diverse client base. Their clients span retail investors (through WisdomTree Prime, $1 minimum), financial advisors ($6.1 billion in model portfolio AUA with 2,800+ advisors), and institutional clients including stablecoin issuers, crypto-native treasuries, and DeFi protocols. CEO Jonathan Steinberg said on the Q4 2025 earnings call that he "wouldn't be surprised if our tokenized money market fund doesn't emerge as the largest fund within WisdomTree."

Connecting WisdomTree Users to Cap’s Protected Yield

Cap is a covered credit system that offers protected yield through its financial guarantee market. The protocol has three participants: depositors who supply dollar-equivalent assets (stablecoins and tokenized MMFs), operators who compete to borrow that capital, and delegators who use their assets to underwrite individual operator performance. Because these operators, institutions like Susquehanna, Flow Traders, Concrete, and others, have built reputations and established agreements with delegators, they can access unsecured credit backed by third parties. If an operator fails to fulfill their obligation, the delegator's collateral is slashed and redistributed to depositors, ensuring they remain fully protected. Since launching in August 2025, Cap has surpassed $500M in deposits.

Since November 2025, Cap has supported WisdomTreee’s WTGXX as a deposit asset within the Cap Stablecoin Network (CSN). This means that institutions with money market deposits at WisdomTree can stake their deposits into Cap for incremental yield. This yield is sourced from borrowers at Cap competing to borrow dollars from Cap at a rate that is higher than WTGXX provides to holders.

What makes this integration significant is that it offers a compliant and regulation-friendly path for institutions to interact with DeFi. Deposits by WisdomTree users are segregated from deposits of permissionless stablecoins. Only institutions registered with WisdomTree can then source these deposits for private credit. This creates a KYC/KYB silo within Cap’s open market: depositors are separated from permissionless users and institutions know exactly where funds are from.

Conclusion

The tokenized dollar economy is no longer merely a hypothesis. Stablecoins have surpassed $300 billion in market cap and tokenized treasuries and money market funds have crossed $10 billion. The regulatory framework exists and the technical infrastructure exists. What has been missing is the connective tissue that turns these regulated, yield-bearing assets from passive instruments into active tools in onchain finance which is exactly what Cap provides

By accepting WTGXX as a deposit asset, Cap creates a direct path from the most conservative corner of institutional finance, regulated money market funds backed by U.S. Treasuries, into its protected credit engine. The entire process is enforced entirely by automated and verifiable financial guarantees that put user safety first.

For WisdomTree, the integration extends WTGXX's utility beyond what any lending market or reserve arrangement can offer. For Cap, it brings institutional credibility and a new class of depositors that has never had an avenue to use decentralized finance before. And for the broader market, it's proof that the bridge between traditional finance and decentralized finance has arrived.