Goldman Sachs and Bank of New York Mellon have partnered to create a platform that allows institutional investors to buy tokenized money market funds, marking a significant step forward in the digitization of the $7.1 trillion industry.
The move enables clients of BNY, the world’s largest custody bank, to invest in money market funds whose ownership will be recorded on Goldman’s blockchain platform. This project has already signed up fund titans such as BlackRock, Fidelity Investments, and Federated Hermes, as well as the asset management arms of both firms.
The Wall Street giants believe that tokenizing this industry is a crucial step forward for digital assets, following President Donald Trump’s signing of the GENIUS Act, which aims to boost the popularity of U.S.-regulated stablecoins. Stablecoins are pegged to the US dollar and have been explored as a payment method by major banks like JPMorgan Chase, Citigroup, and Bank of America.
Tokenized money market funds, on the other hand, offer a yield to investors, making them an attractive option for hedge funds, pensions, and corporations looking to park their cash. This new development is expected to increase efficiency in transactions, reducing frictions present in traditional markets.
By creating digital certificates of ownership for money market funds on a blockchain, Goldman and BNY’s partnership aims to facilitate faster settlement, round-the-clock trading, and automation. The banks will maintain traditional records alongside the tokenized assets to ease the transition.
The goal is to create a more efficient digital ecosystem, where investors can use stablecoins for global payments and tokenized money market funds for cash management. Tokenizing the asset class could also enable seamless transfers between financial intermediaries without requiring liquidation of funds into cash.
This development has the potential to free up time and capital currently consumed by traditional transactions, allowing investors and corporations to exchange tokens instead of selling money market funds as collateral. The banks believe this will create a significant amount of utility in an instrument where it did not exist before.
Source: https://www.cnbc.com/2025/07/23/goldman-sachs-bny-money-market-fund-digital-tokens.html