Key Takeaways:
- Goldman and BNY Mellon are enabling institutional clients to invest in tokenized money market funds using blockchain.
- The move allows for 24/7 trading, faster settlement, and broader use as collateral.
- Major fund managers like BlackRock and Fidelity have already joined the initiative, signaling growing institutional momentum.
Goldman Sachs and Bank of New York Mellon (BNY Mellon) have created a platform for tokenized money market fund investments. The initiative enables large investors to access digital versions of traditional cash-equivalent funds, recorded on Goldman’s blockchain ledger.
Major Fund Managers Join the Blockchain Push
Backed by heavyweights like BlackRock, Fidelity Investments, Federated Hermes, and the asset management arms of Goldman and BNY, the project marks a significant milestone in the evolution of digital finance. BNY Mellon, the world’s largest custody bank, will allow its clients to invest in money market funds whose ownership is tracked via Goldman’s tokenization platform.
“We have created the ability for our clients to invest in tokenized money market share classes across a number of fund companies,” said Laide Majiyagbe, BNY’s global head of liquidity, financing, and collateral.
A Blockchain-Driven Upgrade for Cash Management
Unlike stablecoins, tokenized money market funds provide yield, offering an attractive digital asset for hedge funds, pensions, and corporations looking for efficient cash parking. These funds typically invest in short-term, highly liquid instruments like Treasurys and commercial paper and have grown in popularity amid rising interest rates.
Tokenization allows for faster settlements, 24/7 trading, and automation, addressing many inefficiencies in traditional finance. While BNY will maintain conventional records in parallel, the blockchain-based tokens will enable new capabilities, such as real-time transfers and programmable ownership.
Also Read: Microsoft AI Raids Google DeepMind as Talent War Escalates
The Post-GENIUS Act Era Begins
The timing of the announcement follows the signing of the GENIUS Act, a new law regulating U.S. stablecoins. While banks like JPMorgan, Citigroup, and Bank of America explore stablecoin use in payments, Goldman and BNY are taking the next step by combining yield-bearing funds with blockchain efficiency.
According to Mathew McDermott, Goldman’s global head of digital assets, tokenized money market funds could soon serve as collateral across multiple financial use cases—streamlining everything from margin management to trade settlement.
Tokenization Poised to Reshape Market Infrastructure
The partnership between Goldman Sachs and BNY Mellon positions tokenized money market funds as a cornerstone of a future always-on financial system. With major asset managers on board and potential collateral use cases ahead, this innovation could significantly improve how institutions manage cash and risk.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of CoinBrief.io. Before making any investment decisions, you should always conduct your own research. Coin Brief is not responsible for any financial losses.
