NEWTOWN, PA — Precidian Investments LLC secured a U.S. patent for technology that allows securities to exist as either conventional shares or asset-backed digital tokens, giving investment managers a potential route into tokenized markets while retaining features associated with traditional exchange-traded funds.
The U.S. Patent and Trademark Office granted U.S. Patent No. 12,646,040 for Precidian’s Asset-Backed Digital Tokens technology, according to the Newtown-based investment technology company.
The structure is designed to allow investments to function in a tokenized form while deriving their value from identifiable, fund-managed underlying assets. Unlike cryptocurrencies or non-fungible tokens that may not represent an interest in traditional investment assets, Precidian’s structure links the digital tokens to securities held by a fund.
A central feature of the technology is the ability to convert the tokens into ETF shares, according to Precidian. That approach is intended to combine the transferability associated with digital tokens with an investment structure in which managers can compete through portfolio strategy and performance.
The patent could also give Precidian a licensing opportunity as financial institutions explore tokenized securities. HSBC is already licensing the technology on a non-exclusive basis for a digital offering, according to the company.
Precidian Chief Executive Officer Daniel McCabe characterized the structure as an effort to bring digital-asset functionality into established investment vehicles.
“It’s our belief that this structure will advance the market environment for decades to come,” McCabe stated.
The newly issued patent forms part of a broader intellectual-property portfolio Precidian is developing around its Asset-Backed Digital Tokens. Additional patent applications remain pending before the U.S. Patent and Trademark Office.
Precidian plans to pursue additional licensing arrangements with financial institutions and other market participants seeking to deploy the technology.
Support the local news that supports Chester County. MyChesCo delivers reliable, fact-based reporting and essential community resources—free for everyone. If you value that, click here to become a patron today.