Goldman Sachs and Bank of New York Mellon are moving to record ownership of money market funds on blockchain technology, joining a growing list of financial institutions seeking to apply crypto infrastructure to traditional assets.
The two banks are collaborating to allow institutional investors to hold digital tokens representing shares in money market funds managed by leading investment firms, including BlackRock, Fidelity Investments, Federated Hermes, as well as their own asset management arms, according to statements released Wednesday.
The partnership comes shortly after Robinhood launched tokenized shares of OpenAI and SpaceX to investors in the European market. That move drew swift reaction from OpenAI, which was quick to say holders of Robinhood's AI tokens should not expect to have the same rights of ownership as those with actual equity in the privately held tech giant.
BNY, the world’s largest provider of administrative services to money managers, will offer these tokenized funds to investment-firm and corporate clients through its LiquidityDirect cash-management platform, the Wall Street Journal reported. Goldman Sachs will use its private blockchain platform, GS DAP, to record and track the ownership of these tokens, while BNY maintains the official books and settlements .
The move is part of a broader trend among financial institutions to experiment with tokenization, a process that creates digital representations of real-world assets on distributed ledgers. According to Bloomberg, BlackRock, Franklin Templeton, and KKR have all announced similar efforts, and McKinsey estimated the tokenization market could reach $2 trillion by 2030 .
Proponents say tokenized money market funds could make it easier for investors to use fund shares as collateral and enable faster, more efficient transactions. “Using tokens representing the value of shares of money market funds on GS DAP would enable us to unlock their utility as a form of collateral and open up more seamless transferability in the future,” said Mathew McDermott, global head of digital assets at Goldman Sachs, in a statement to Bloomberg .
The Wall Street Journal noted that the initiative comes as new US regulation, the Genius Act, provides a framework for tokenized dollars, known as stablecoins, and is expected to drive greater adoption of tokenized assets.
“For any of the asset issuers that have perhaps been on the sidelines or have been hesitant to go full force into the world of tokenized securities, this now offers them a little bit of additional air cover to pursue participating and standing up their own projects in this ecosystem,” said Michael Sonnenshein, president of Securitize .
While advocates highlight potential cost savings and operational efficiencies, some skeptics warn that tokenization could introduce volatility and cybersecurity risks from the crypto sector into traditional finance. As of mid-July, money market funds in the US held about $7.1 trillion in assets, according to the Investment Company Institute .
A new analysis finds long-running fiscal woes coupled with impacts from the One Big Beautiful Bill Act stand to erode the major pillar for retirement income planning.
Caz Craffy, whom the Department of Justice hit with a 12-year prison term last year for defrauding grieving military families, has been officially exiled from the securities agency.
After years or decades spent building deep relationships with clients, experienced advisors' attention and intention must turn toward their spouses, children, and future generations.
The customer’s UBS financial advisor allegedly mishandled an options strategy called a collar, according to the client’s attorney.
An expansion to a 2017 TCJA provision, a permanent increase to the standard deduction, and additional incentives for non-itemizers add new twists to the donate-or-wait decision.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
