On May 7, 2025, you will see the Goldman Sachs company logo on the floor of the New York Stock Exchange (NYSE) in New York City.
Brendan McDermid | Reuters
Goldman Sachs and Bank of New York Mellon are set to announce that CNBC has learned that they have created the ability for institutional investors to purchase tokenized money market funds.
Clients of BNY, the world’s largest management bank, can invest in money market funds where ownership is recorded on Goldman’s blockchain platform, according to executives from two companies.
The project has already signed up for Fund Titan, including BlackRock, Fidelity Investments, Federation Hermes, and Goldman and BNY asset management divisions.
The Wall Street Giants believe to tokenizing the $7.1 trillion money market industry is the next leap in digital assets after President Donald Trump signed a law indicating the arrival of US-regulated stubcoins last week. The Genius Act is expected to boost the popularity and use of Stablecoins, which are usually pinned in US dollars, and Jpmorgan Chase, Citigroup and Bank of America say they are investigating their use in payments.
However, unlike Stablecoins, tokenized money market funds are an attractive place for hedge funds, pensions and businesses to park their cash.
“We have created the ability for our clients to invest in tokenized money market share classes in many fund companies,” said Laide Majiyagbe, global head of liquidity, funding and collateral at BNY. “The tokenization step is important today to enable seamless and efficient transactions without the friction that occurs in traditional markets.”
Banks believe that money market funds are setting the foundation for a future where they trade in real time and on digital ecosystems. Investors and businesses were able to rely on stubcoin for global payments and tokenize money market funds for cash management.
However, when asset classes are tokenized, new features that go beyond speed and ease of use will be funded. According to BNY and Goldman, digitalized funds could ultimately be transferred between financial intermediaries without first liquidating the funds into cash.
Matthew McDermott, Goldman’s global digital assets director, said it could bolster use by the world’s largest financial players as collateral for numerous transactions and margin requirements.
Money market funds are mutual funds that are typically invested in safer, short-term securities, such as the Ministry of Finance, repo agreements, and commercial papers. Institutional and retail investors have been running into asset classes in recent years, pouring about $2.5 trillion since the Federal Reserve launched its rate hiking cycle in 2022.
“The size of this market only provides a great opportunity to generate more efficiency across financial plumbing,” McDermott said. “That’s really powerful because you’re creating utilities with instruments that don’t exist today.”
