BNY Mellon and Goldman Sachs Collaborate on Tokenized Money Market Fund
Publicly traded financial giants JPMorgan Chase and Goldman Sachs announced Wednesday their collaboration on a tokenized money market product to enhance the utility and transferability of money market fund (MMF) shares.
The project, built using technology developed by Goldman Sachs, will enable fund managers to subscribe to MMF shares through BNY Mellon’s Liquidity Direct and digital assets platform. These shares will then be represented as mirrored tokens on Goldman Sachs’s Digital Asset Platform (DAP).
Infrastructure and Leadership
“As the financial system transitions toward a more digital, real-time architecture, BNY Mellon is committing to enabling scalable and secure solutions,” stated Laide Majiyagbe, Global Head of Liquidity, Financing and Collateral at BNY Mellon.
“Mirrored tokenization of MMF shares represents a first step in this transition,” she added. “This initiative allows us to be at the forefront of pioneering this new approach.
Participants and Operations
The initial launch is expected to involve participation from BlackRock, BNY Investments Dreyfus, Federated Hermes, Fidelity Investments, and Goldman Sachs Asset Management. Bookkeeping, record-keeping, and settlement functions will be managed by BNY Mellon.
“Using tokens on GS DAP representing MMF shares unlocks their potential as collateral and facilitates more seamless transferability,” explained Matthew McDermott, Head of Digital Assets at Goldman Sachs. “We are excited about this strategic partnership, which contributes significantly to our vision for the GS DAP platform and ongoing innovation in digital assets.”
Broader Trend
The expansion of financial services via tokenized assets is gaining momentum among institutions. Recents moves include Robinhood establishing a tokenized equity platform for better international access to US stocks and Coinbase exploring its own tokenized solution, while other crypto platforms leverage blockchain like Solana to trade stocks (xStocks).
