The Bank of New York Mellon (BNY) is collaborating with Goldman Sachs to tokenize money market funds (MMFs), using blockchain as the record of ownership. The solution involves subscribing to MMF shares via BNY’s LiquidityDirect. These are tokenized via BNY’s Digital Assets platform, with mirrored tokens on the Goldman Sachs GS DAP blockchain.
The organizations involved in the launch include BlackRock, BNY Investments Dreyfus, Federated Hermes, Fidelity Investments, and Goldman Sachs Asset Management.
Initially the functionality sounds quite basic – subscription and redemption – but the future goal is collateral mobility. Tokenization enables the instant transfer of MMFs that can be used as collateral for margin and other use cases. To date, most tokenized money market funds have targeted the crypto community, whereas this solution has an institutional focus.
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