Moving to 24/7 Trading and Instant Settlement for Onchain Money Market Funds via a Broker-Dealer

Moving to 24/7 Trading and Instant Settlement for Onchain Money Market Funds via a Broker-Dealer If stablecoins represent the first large-scale adoption of tokenized real-world assets (RWAs), tokenized money market funds are clearly the second. According to RWA.xyz, AUM in its Tokenized Treasuries category, comprised primarily of tokenized money market funds and close equivalents, has reached approximately $10 billion, up from $3.8 billion at the end of 2024. The WisdomTree Treasury Money Market Digital Fund (WTGXX) has grown significantly over the past year, reaching over $730 million in AUM this month. In just one year, the overall market has more than doubled, driven by real economic use cases emerging across stablecoin reserves, treasury management, and onchain finance. Tokenized money market funds have so far been limited to date in one key area – liquidity of fund shares. While fund shares are transferable peer-to-peer instantly, these funds still only trade in the primary market once per day, in accordance with the forward pricing rule (Rule 22c-1 of the 1940 Act for those keeping track). If an investor wants to buy or sell shares, they have been limited to doing so only directly with the fund (i.e. the primary market) after the NAV is struck. In crypto, this could seem like an anachronism, and people often don’t get why this might be the case. In a world where assets move instantly and markets operate continuously, once-daily trading windows seem out of place. This misses an important distinction that is critical to understanding why this limitation exists and how it can be addressed. At a high level, two separate concepts get conflated here – timing of primary market transactions and the lack of a secondary market for fund shares. Primary market transactions have a direct economic impact on the fund. Cash that comes into the fund needs to be invested – in a U.S. treasury security or repurchase agreement (“repo”) – to generate yield. Likewise, portfolio assets need to be sold to raise cash to meet redemptions. If a fund were required to support continuous primary market liquidity, it would need to hold larger cash balances to manage intraday flows. If that cash is earning a lower interest rate, this would create a persistent cash drag that would dilute returns for all shareholders. These mechanics impose real constraints on how a money market fund can operate in the primary market, regardless of whether its shares are tokenized or not. These constraints say nothing of the secondary market - the ability for fund shares to trade between two parties. Secondary market trades do not change the fund’s assets, do not require portfolio transactions, and do not affect yield for existing shareholders. In this sense, the structure resembles how ETFs operate today, with secondary market trading occurring intraday outside of the fund and primary market remaining subject to defined purchase and redemption processes (e.g., T+1). This distinction of what happens inside the fund vs. outside the fund is a key point. When trading occurs outside the fund, liquidity can be provided by third parties, timing can be flexible, and the economic impact is localized to the counterparties involved rather than borne by all shareholders. WTGXX institutional shareholders will soon be able to trade and settle shares of the fund against stablecoins on an instant

[1], 24/7 basis with a registered broker-dealer acting as principal. This marks the first time registered tokenized money market fund shares have been permitted to trade and settle instantly within the U.S. regulatory perimeter via a broker-dealer acting as principal. These transactions settle onchain from dealer inventory, allowing trades of shares to complete and instantly settle while preserving the fund’s existing primary market structure. Liquidity is provided by the broker-dealer from its own inventory and is therefore subject to available capital and inventory limits. Dealer inventory is replenished through the fund’s normal daily subscription and redemption cycle, ensuring that secondary market liquidity is cleanly separated from fund operations. At launch, WisdomTree Securities, an affiliated broker-dealer, will operate this liquidity facility for institutional customers of WisdomTree Connect. USDC will initially be the available stablecoin for these trades. Each trade will be at a price of $1.00 per share, with the dealer charging a commission. This trade is done within the U.S. regulatory perimeter, giving investors confidence that this functionality can be accessed without stepping outside U.S. securities laws. We intend to bring this functionality to WisdomTree Prime retail users later in 2026. Following the framework outlined above, these transactions occur entirely outside the fund. Because the fund is not a counterparty to the trade, secondary market activity has no impact on portfolio management, liquidity buffers, or yield for existing shareholders. This separation is a deliberate design choice. It allows liquidity provision to scale over time - potentially across additional dealers and capital sources - without introducing performance drag or operational complexity inside the fund itself. Importantly, instant settlement refers to the transfer of fund shares between the dealer and investor using dealer inventory. The fund itself continues to operate under its existing primary market structure, with subscriptions and redemptions occurring at the fund’s daily NAV in accordance with Rule 2a-7 and other 1940 Act rules. We view this as a critical structural consideration. By externalizing liquidity while maintaining disciplined primary market mechanics, WTGXX can support continuous trading without penalizing long-term shareholders. In contrast, some alternative approaches in the market implicitly socialize liquidity costs across all investors, a tradeoff we believe is neither necessary nor sustainable. This design allows WTGXX to function as a true yield-bearing savings vehicle within the stablecoin economy, while retaining the characteristics investors expect from a regulated money market fund. WisdomTree has also recently introduced continuous dividend accrual for WTGXX shares. Historically, like traditional money market funds, WTGXX accrued dividends based on a once-daily snapshot taken at 4:00 p.m. ET. Ownership at that moment determined who earned the day’s income, regardless of how long shares were held during the rest of the day. WTGXX now accrues dividends continuously throughout the day. When shares transfer from one investor to another, the recipient begins accruing income immediately starting from the block in which their ownership is recorded on the relevant blockchain. Rather than allocating income based on a single point-in-time snapshot, dividends are distributed in proportion to the amount of time capital is actually held during the day. We think of this as forward-smoothing the income generated by the fund’s assets. The yield produced by prior-day capital is no longer allocated discretely, but continuously, aligning economic outcomes more closely with actual ownership. This change improves fairness between counterparties, reduces timing friction around transfers, and better reflects how value moves in onchain markets. When combined with instant secondary market trading, continuous accrual completes the transition to a true 24/7 product. Shares can change hands at any time, including with a registered broker-dealer (subject to available liquidity) and yield is always “on,” updating continuously as ownership changes. Importantly, this functionality is achieved without altering the fund’s underlying investment process or disadvantaging existing shareholders. Even after growing to roughly $10 billion in AUM, tokenized money market funds remain small relative to the $300 billion stablecoin market, and smaller still compared to traditional dollar liquidity. Looking at U.S. money supply, yield-bearing money has historically been larger than purely transactional money. If stablecoins continue to scale - potentially into the trillions - then yield-bearing onchain dollars should scale alongside them, even surpassing them in size. By introducing instant secondary market liquidity and continuous dividend accrual, WTGXX will have removed two of the remaining structural frictions holding this category back. These changes will allow tokenized money market funds to function as true 24/7 financial instruments, positioning them to grow from an emerging use case into core onchain financial infrastructure. Investors should carefully consider the investment objectives, risks, charges and expenses of the Funds before investing. U.S. investors only: To obtain a prospectus containing this and other important information, please call 866.909.WISE (9473), or click here to view or download a prospectus online. Read the prospectus carefully before you invest. There are risks involved with investing, including the possible loss of principal. Past performance does not guarantee future results.WisdomTree Digital Funds are distributed by WisdomTree Securities, Inc., Member FINRA.FINRA’s BrokerCheck – check the background of this firm or your investment professional on FINRA’s BrokerCheck. There are risks associated with investing, including possible loss of principal. Blockchain technology is a relatively new and untested technology, with little regulation. Potential risks include vulnerability to fraud, theft, or inaccessibility, and future regulatory developments affect its viability. You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the Fund is not a bank account and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund’s adviser is not required to reimburse the Fund for losses, and you should not expect that the adviser will provide financial support to the Fund at any time, including during periods of market stress.

[1] Throughout this post, references to “instant” or “instant settlement” refer to settlement that occurs following execution and onchain confirmation, rather than through traditional end-of-day or T+1 settlement cycles.