By Alex V 
In a financial world first, Goldman Sachs and Bank of New York Mellon (BNY Mellon) have joined forces to digitise the $7.1 trillion money market fund market. Institutional investors are now able to buy tokenised money market funds using blockchain technology—an innovation that marries asset security with the convenience of digital finance.
This partnership enables BNY Mellon’s clients, who are the largest custody bank in the world, to invest in money market funds whose record ownership will be kept on Goldman Sachs’ own blockchain platform. Already, industry titans BlackRock, Fidelity Investments, Federated Hermes, and even Goldman and BNY’s asset management arms have signed up.
The timing of this technology is coinciding with a turning point in regulatory change. The new GENIUS Act, signed into law by President Donald Trump, created a legal framework for U.S.-regulated stablecoins. This has spurred the likes of JPMorgan Chase, Citigroup, and Bank of America to start looking at digital payments fueled by stablecoins. While stablecoins seek to offer dollar-pegged payment solutions, tokenized money market funds present an additional benefit: yield.
Laide Majiyagbe, Global Head of Liquidity, Financing, and Collateral at BNY Mellon, emphasised that this development enables clients to transact more seamlessly and efficiently. “We’ve created the ability for our clients to invest in tokenised money market share classes across a number of fund companies,” she said. “The tokenisation process reduces traditional market frictions and enhances settlement speed.”
Money market funds historically hold low-volatility instruments like U.S. Treasurys and commercial paper. They have always been viewed as safe and liquid, but the genius in this case is issuing digital certificates of ownership on a blockchain. That increases the velocity, usability, and convenience of these funds in a manner never before possible. For example, it could obviate having to sell assets for collateral, rather allowing direct transfers of tokens among counterparties.
This comes as money market fund demand continues to grow. Since the Federal Reserve started to increase interest rates back in 2022, investors have directed over \$2.5 trillion into the asset class. The tokenised new format makes it even more attractive for pension funds, hedge funds, and corporations looking for both yield and safety.
Goldman Sachs’ Global Head of Digital Assets, Mathew McDermott, highlighted the transformational impact of tokenisation. “The sheer scale of this market offers a huge opportunity to create far more efficiency across financial systems. You’re bringing utility to an asset class that didn’t previously have it,” he said.
In addition, BNY will keep having traditional records together with tokenised ones during this transition phase to facilitate the transition for clients unwilling to go fully digital.
As round-the-clock trading, settlement through automation, and interoperability become a reality, tokenised money market funds may transform the way cash is held, transferred, and spent in global finance—signalling the dawn of a 24/7 digital economy.
FAQs
What are tokenised money market funds?
Tokenised money market funds are digital versions of conventional money market funds. They are kept on a blockchain, so they can be transferred with faster, more secure, and more convenient transactions.
In what ways is this different from stablecoins?
Although stablecoins are for use in payments and are most often tied to the dollar, tokenised money market funds earn yield. They too are collateralised by low-risk, short-term assets and may be used as collateral in financial transactions.
What advantages do investors gain through tokenisation?
Tokenisation provides instant settlement, lower costs of operations, 24/7 access to trading, and increased collateral efficiency. Tokenisation eliminates delays and manual processes traditionally associated with purchasing or redeeming fund shares.
Who can invest in these tokenised funds?
At present, the offer is being made available to institutional investors—hedge funds, pension funds, and large corporate firms—through platforms such as BNY Mellon’s custody system and Goldman Sachs’ blockchain infrastructure.
Is this the future of asset management?
Numerous finance professionals do. Tokenised assets promise increased transparency, automation, and flexibility. As regulation picks up, it’s predicted that much of global finance will move towards blockchain-based systems over the next decade.
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