Two Abu Dhabi firms, Realize, a financial assets tokenization platform, and Neovision Wealth Management have launched an blockchain enabled investment vehicle that will buy units of exchange traded funds (ETFs) focused on U.S. Treasury bills and convert these assets into digital tokens that can be held, traded and transferred.

The fund is called Realize T-BILLS Fund and it will buy BlackRock’s iShares and State Street’s SPDR, tokenize units from these ETFs, and incorporate them within the fund, Dominik Schiener, Chaiman and co-founder of technology company Realize as well as IOTA Foundation, told Reuters in an interview. It hopes to grow to a $200-million fund.

Realize will tokenize the units of the T-BILLS Fund, while Neovision will manage it.

Tokenized Treasuries are a growing segment of the crypto market, with a market capitalization of $2.4 billion on public blockchains, primarily Ethereum, according to data platform rwa.xyz. They are effectively digital tokens created on a blockchain and backed by U.S. government debt, and issued both by blockchain-native firms and traditional institutions, notably BlackRock and Franklin Templeton.

In March, BlackRock launched its first tokenized fund called BUIDL on the Ethereum blockchain, investing 100% of its assets in cash, U.S. Treasury bills and repurchase agreements or repos. The BlackRock fund has a current market cap of $530 million.

The Realize fund, the first tokenized fund to be domiciled out of the Abu Dhabi Global Market, will issue the $RBILL token and will serve as the digital representation of the units of the fund. They will initially launch on both the IOTA and Ethereum blockchain networks.

Dominik Schiener, Realize’s IOTA Foundation Founder and Realize Founder, told AGBI magazine in UAE, that his target was for the fund to have $100 million in assets under management in 12 months’ time. Of this, he expects 20 to 30 percent will come from investors in the Gulf and the remainder from Europe and Southeast Asia.

“Southeast Asia is going to be the largest demographic for us. We also want to do a lot in the Middle East because it has a high penetration of crypto users and wealthy individuals,” Schiener said.

Arvind Ramamurthy, Abu Dhabi Global Market’s chief market development officer, said in a statement announcing the fund’s launch: “As a tokenized investment fund adhering to stringent regulatory standards, it positions the international financial Centre of Abu Dhabi as a global leader in real-world asset tokenization.”

Dr. Ryan Lemand, co-founder and chief executive officer of Neovision, said it makes sense to buy T-Bill ETFs and tokenize them, instead of outright purchasing Treasury bills in the market. He noted buying cash Treasuries in the market would involve continuous transaction costs because they will have to be bought again and again.