Goldman Sachs (NYSE: GS) and BNY Mellon (NYSE: BK) announced a landmark collaboration to offer tokenized money market funds (MMFs) for institutional investors, leveraging Goldman's private blockchain technology. The initiative, described as a "significant step towards enhancing utility and transferability" of MMF shares, enables real-time settlement and 24/7 market access while reducing operational costs. BNY Mellon—custodian of $55.8 trillion in assets—will use Goldman's blockchain to maintain ownership records.
Major financial institutions including BlackRock, Fidelity Investments, Federated Hermes, and both banks' asset management arms will participate in the launch. Laide Majiyagbe, BNY's Global Head of Liquidity, emphasized this "first-of-its-kind initiative" bridges traditional finance with emerging technologies, allowing clients to navigate market transformations confidently.
The move follows the recent passage of the GENIUS Act, which bans interest-bearing stablecoins in the U.S., potentially accelerating demand for tokenized yield products. Tokenized short-term funds have surged to $5.7 billion in assets since 2021, backed primarily by U.S. Treasuries. This institutional shift coincides with broader industry movements like Robinhood's planned tokenized stock derivatives platform, which Galaxy Digital notes could disrupt traditional exchanges by decentralizing liquidity.