Here’s what you’ll find in today’s edition:

• The complementary roles of tokenized money market funds and stablecoins.

• Casey breaks down what you need to know ahead of the Fed’s policy-setting meeting. 

• A refresher on this week’s CPI print, unemployment figures.

Tokenized yield funds, stablecoins a “powerful” combo

Given yesterday’s stablecoin bill progress and BlackRock’s tokenized money market fund hitting $1 billion AUM, I thought it’d be a good time to highlight the expected growth of these segments in tandem.

The asset milestone for BlackRock’s BUIDL — a fund investing in cash, US Treasury bills and repurchase agreements — comes a week before its first birthday. The tokenized treasury category (with other contributors like Ondo, Hashnote and Franklin Templeton) has grown to roughly $4.4 billion.

BlackRock’s Robbie Mitchnick told me during Wednesday’s Blockworks roundtable that a majority of those using BUIDL are crypto-native. 

They’re firms, for example, seeing the value prop in generating yield on holding cash balances in an efficient yield-generating way. Perhaps shuffling capital between countries or making quick global payments. And then getting liquidity faster via stablecoin exit ramps.

Waqar Chaudry, Standard Chartered’s head of digital assets, financing and securities services, pointed to some initially believing that tokenized money market funds could replace stablecoins. 

Many might prefer tokenized funds for collateral management, Chaudry added. But they’ll co-exist with stablecoins, as he is seeing money market funds being subscribed and redeemed via stablecoins on a 24/7 basis.

“I’m not saying it’s 50/50 or 80/20,” he said of the stablecoin/tokenized MMF mix. “We’ll see how it develops over the next few years, but they’re definitely complementary.”

Michnick agreed, noting he sees tokenized money market funds as the predominant cash savings vehicle. Stablecoins, meanwhile “will retain their dominance” as the payment and transaction instrument.

“Both are a little bit better than the other at those respective use cases as long as you keep the frictions down to an extremely low or near-zero level to be able to move between them,” Mitchnick said. “Then you can use them in duality in a really powerful way.”

While tokenized treasurys are gaining steam, stablecoins are a much larger segment — sporting a roughly $220 billion market cap.

US lawmakers see the value of stablecoins. Casey yesterday detailed how a bill aiming to establish regulatory guidelines for stablecoin issuers advanced to the Senate floor.

But Mitchnick noted: “What we haven’t seen happen to date in really any arena of tokenization is broad-based uptake from investors and holders who have always lived in the traditional assets base and on those rails.”

That speaks to the potential growth for BUIDL in the years ahead as the TAM expands.

Tokenized bonds’ story is “still not gelling well in terms of commercial viability,” Chaudry said.

As for why there’s likely to be “limited traction” for tokenized equities, Chaudry added, those markets are pretty efficient already. Then there are efforts to tokenize more illiquid asset classes (i.e., real estate and private equity).

Execs from BNY, Ondo Finance, Securitize (the firm that worked with BlackRock on BUIDL) and Nomyx will join me on a Blockworks Digital Asset Summit panel called “Tokenization: Rebooting the Global Financial System” to chat more about this.

See you there?

— Ben Strack

The number of Senate votes needed for the Republican spending bill — to avoid a government shutdown before a midnight deadline.

Senate Democratic Leader Chuck Schumer said Thursday night he planned to support the bill. Nancy Pelosi countered: “Democrats must not buy into this false choice.” We hadn’t seen a voting result at the time of writing.

As Blockworks kicks off the Digital Asset Summit in New York, Fed officials will be gathering for their March FOMC meeting in Washington. 

The central bank is overwhelmingly expected to hold interest rates as-is, continuing a pause to its rate-cutting schedule. After next week, the Fed won’t have another rate-setting meeting until May; odds of a cut then are only around 30%, CME data shows. 

Betting on a “Trump put” at this point is, dare I say, wishful thinking. President Trump announced additional tariffs on all steel and aluminum imports and Commerce Secretary Howard Lutnick said the administration is going to proceed with the duties even if it means pushing the economy into a recession. 

A “Fed put” may not be entirely off the table, but it’s not coming anytime soon. Powell has made it clear that it will take substantial weakening in the labor market for central bankers to rethink the current pause. 

HSBC analysts said in a note this week that the Fed isn’t budging until the data does. Of course, worse data means increased recessionary fears and lower asset prices. We’re between a rock and a hard place here, they added.  

So it’s all a bit of a waiting game for now. The labor market looks okay, but tariffs could weigh on hiring and further anticipated DOGE layoffs have not yet been reflected in the data. 

Instead of doom-scrolling next week, we recommend coming to DAS, where you can spiral and speculate in real life — maybe even with me, Ben and Felix.

— Casey Wagner

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Happy Friday! It was a busy week of data leading up to the Fed’s policy-setting meeting next week. Meanwhile, members of Congress seem to have come to an agreement on a federal budget. But should they not get a bill passed by midnight, we’re headed toward a government shutdown. 

Here’s a recap: 

• February’s CPI print showed prices increased 2.8% year over year, still above the Fed’s 2% target but a decline from the 3% annual increase recorded in January. Economists had projected CPI to come in at 2.9% for the 12 months ended February. A key sector pushing inflation lower is housing, which historically tends to be one of the more stubborn components of the print.

• First-time unemployment filers last week totaled 220,000, down from 222,000 the week prior. The figure also came in below estimates, signaling strength in the labor market. Analysts say mass layoffs from DOGE are not yet reflected in the data, though.

— Casey Wagner

• The stock market surged early Friday after Schumer’s comments on the GOP stopgap funding bill. The S&P 500 and Nasdaq Composite Indexes were up 1.7% and 2.1%, respectively, at 2 pm ET.  

• Bitcoin also climbed, hovering around $84,300 at that time — up 4% from 24 hours prior. 

• Casey, Ben and Felix are looking forward to meeting some of you subscribers in person at DAS next week. Come say hello!