F/M Investment’s CEO Alexander Morris on Tokenization, ETFs, and Bridging to On-Chain Finance

Why It Matters

Tokenizing a mainstream Treasury‑Bill ETF could democratize access to low‑risk assets for digital investors while establishing a regulated, 1:1 bridge between traditional finance and blockchain, reshaping the future of on‑chain securities trading.

Key Takeaways

• FM Investments seeks SEC approval to tokenize T‑Bill ETF.
• Tokenization will maintain 1:1 parity with underlying securities.
• Access limited to regulated ATS platforms with AML/KYC safeguards.
• Liquidity providers essential to avoid fragmented pricing across chains.
• Full on‑chain settlement expected 12‑36 months, pending regulator.

Summary

The interview centers on FM Investments’ pioneering effort to bring a traditional 90‑day Treasury‑Bill ETF onto a blockchain. CEO Alexander Morris explains that the firm has petitioned the SEC for a “plumbing change” that would allow the existing share class to be tokenized directly, preserving a 1:1 conversion ratio and enabling the token to trade as if it were the underlying ETF.

Morris emphasizes that the token will not be a replica but a true digital representation, gated through regulated Alternative Trading Systems (ATS) that enforce AML/KYC checks. By limiting participation to white‑label ATS venues, the firm aims to protect the 85‑year‑old trust framework of 40‑act funds while still granting digital investors—ranging from crypto‑savvy traders to traditional brokerage clients—access to the high‑yield, low‑risk T‑Bill product.

Key quotes illustrate the firm’s cautious stance: “We don’t want to give the imperfect trust to miscreants” and “allow T‑Bill to be converted into a token and then back again at a 1:1 ratio.” Morris also notes that liquidity providers will be crucial to avoid fragmented pricing across multiple private chains, and that the ultimate goal is seamless movement between chains and back to the original ETF.

If successful, this bridge could unlock trillions of dollars for on‑chain finance, set a regulatory precedent for tokenizing other 40‑act funds, and accelerate the industry’s shift toward atomic settlement. However, full deployment hinges on SEC clearance and coordinated effort among broker‑dealers, transfer agents, and market makers, with a realistic timeline of 12‑36 months before meaningful on‑chain trading materializes.

Original Description

Dave Nadig, President and Director of Research at ETF.com, sat down with Alexander Morris, CEO of F/m Investments, at the ETF Beach House at Future Proof Citywide to talk tokenization and ETFs. The conversation covers the work the firm is doing to potentially tokenize one of their funds and the complexities and considerations of that process.

To see the conversation with a full transcript, go here: https://www.etf.com/sections/conferences/fm-investments-ceo-tokenization-etfs-chain-finance

Learn more about F/m Investments here: https://www.fminvest.com/

DISCLOSURES

1. Tokenization: The process of converting ownership of a real-world or financial asset into a digital token that exists on a blockchain.

2. Atomic Settlement process: A transaction process where the exchange of assets and payment happens simultaneously and completely – or not at all.

3. Stablecoin: A digital asset that keeps a steady price by being backed or linked to something stable.

Investors should consider the investment objectives, risks, charges and expenses carefully before investing. For a prospectus or summary prospectus with this and other information about the Fund, please call 1-800-617-0004. Read the prospectus or summary prospectus carefully before investing.

Investments involve risk. Principal loss is possible. As with all ETFs, Shares may be bought and sold in the secondary market at market prices. Interest rate risk is the risk of losses attributable to changes in interest rates.

In general, if prevailing interest rates rise, the values of debt instruments tend to fall, and if interest rates fall, the values of debt instruments tend to rise.

TBIL Fund Risks: The UST 3 Month Bill Fund may be susceptible to an increased risk of loss, including losses due to adverse events that affect the UST 3 Month Bill Fund’s investments more than the market as a whole, to the extent that the UST 3 Month Bill Fund’s investments are concentrated in a particular issue, issuer or issuers, country, market segment, or asset class. While U.S. Treasury obligations are backed by the “full faith and credit” of the U.S. Government, such securities are nonetheless subject to credit risk (i.e., the risk that the U.S. Government may be, or be perceived to be, unable or unwilling to honor its financial obligations, such as making payments).

RBIL Fund Risks: The Bloomberg US Ultrashort TIPS 1-13 Months Index is composed of equally weighted sub-components that have a remaining maturity from one (1) month up to (but not including) thirteen (13) months (e.g., 1-2 month maturities, 2-3 maturities, etc.). Federal Reserve holdings of TIPS are excluded from the face amount outstanding of each bond in the Underlying Index.

The F/m Funds are distributed by Quasar Distributors, LLC, which is not related to the issuer or financial advisor.