MUFG Asset Management has launched a domestic tokenized money market fund (MMF) that it describes as a first in the Japanese market after announcing plans late last year. At this stage it is more of a demonstration experiment among group companies to trial the process, with plans to open it to institutional investors at a later date.
Technically the fund, which invests in government bonds of three months or less, is a tokenized investment trust, with Mitsubishi UFJ Trust & Banking acting as trustee. MUFG Morgan Stanley will ultimately be the distributor, and the blockchain platform is Progmat, the largest tokenization platform in Japan, which was founded by MUFG although it now owns a stake of around 49%. Like other MMFs, the fund can be purchased or redeemed daily, and according to the Nikkei the group has seeded it with a Yen 200 million investment ($1.3 million).
The fund’s investment profile, government bonds of three months or less, mirrors the assets that Japanese stablecoin issuers can now hold in their reserves. Unlike the US GENIUS Act which permits reserves to be invested in money market funds or repo, Japanese legislation only allows investment in bonds with a short remaining maturity. So the fund itself cannot be used in stablecoin reserves.
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