Federated Hermes, the $912 billion asset manager, has partnered with Prometheum to distribute tokenized funds through conventional broker dealers and advisers. The first tokenized money market funds (MMFs) is expected in the first quarter of 2027.
The majority of tokenized funds are aimed at crypto firms or large institutions. This one targets the brokerage accounts where most Americans hold their investments. “Until now, tokenized funds have primarily been issued on platforms that sit outside the mainstream brokerage system,” said Aaron Kaplan, Prometheum’s founder and co-CEO. There is a snag. The most obvious use for a tokenized MMF in a brokerage account is to earn a return on idle cash, but that competes with one of the industry’s biggest earners.
Federated already covers the other markets. It is part of the BNY and Goldman Sachs platform that mirrors MMF shares as tokens for institutions. Archax and Conduit offer tokenized access to its funds in the UK and Asia. In June it launched a conventional fund designed for stablecoin reserves. In each tokenized case a third party created the token. This time the announcement talks of issuing “digital securities”. That suggests Federated will issue the shares on chain itself. Its digital assets head Kevin Barr joined in May after more than 14 years at BNY, where he led digital cash.
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