KAIO, a tokenization firm regulated by Abu Dhabi, announced on Monday that it has secured $8 million in funding from a strategic investment round led by Tether and other prominent crypto and institutional investors. This funding aims to support the development of infrastructure that enables the distribution of traditional funds on blockchain networks. The investment brings KAIO's total funding to $19 million, with new investors such as Systemic Ventures and repeat investors like Further Ventures and Laser Digital.

Existing backers, including Brevan Howard Digital, also participated in the round. KAIO specializes in creating tokens for products from companies like BlackRock, Brevan Howard, and Hamilton Lane, making them accessible through blockchain-based systems. The firm plans to utilize this investment to expand its offerings to include credit, structured investments, and exchange-traded funds. Furthermore, KAIO intends to launch an on-chain fund in collaboration with Mubadala Capital, an Emirati private equity firm with $385 billion in assets under management.

By tokenizing institutional funds, KAIO aims to lower the barriers to entry for investors, with minimum investment requirements starting at $100 for eligible users, significantly lower than the typical thresholds for institutional funds. Tether's involvement in this initiative is expected to connect the model to stablecoin flows, leveraging the liquidity of USDT, the most widely used stablecoin with a supply of $185 billion, to channel funds into regulated investment products. According to Tether CEO Paolo Ardoino, "KAIO's unique position unlocks new pathways for capital formation and investment by bringing institutional-grade assets on-chain and making them more broadly accessible, helping expand participation in global financial markets." KAIO's platform is designed to embed compliance into its system and supports regulated distribution frameworks in multiple jurisdictions, including Abu Dhabi, the Cayman Islands, and Singapore. To date, the company has tokenized approximately $100 million in assets and processed over $500 million in transactions.