Goldman Sachs and Bank of New York Mellon teamed up to put money market funds on the blockchain.
Summary
- Goldman Sachs and BNY Mellon are putting money market funds on chain
- Tokens on Goldman Sachs’ platform will track client ownership
- BlackRock, Fidelity, and Federated Hermes will participate in the launch
Major financial institutions are increasingly tapping into the potential of blockchain and asset tokenization. On Wednesday, July 23, the Bank of New York Mellon and Goldman Sachs announced a partnership to tokenize money market funds.
Specifically, BNY Mellon money market funds will now have their digital versions on Goldman Sachs’s blockchain system. These “mirror tokens” will enable the financial giant to maintain a record of customers’ ownership.
BlackRock, Fidelity, and Federated Hermes to join launch
This will be the first time that major financial institutions will be able to purchase shares in money market funds through the blockchain, via BNY Mellon’s LiquidityDirect platform. BlackRock, Fidelity, and Federated Hermes will participate in the initial launch of the platform.
“As the financial system transitions toward a more digital, real-time architecture, BNY is committed to enabling scalable and secure solutions that shape the future of finance,” said Laide Majiyagbe, Global Head of Liquidity, Financing and Collateral at BNY.
Mathew McDermott, Global Head of Digital Assets at Goldman Sachs, explained that tokenizing these funds will enable institutions to use them as real-time collateral. He added:
“Using tokens representing the value of shares of Money Market Funds on GS DAP® would enable us to unlock their utility as a form of collateral and open up more seamless transferability in the future.”
Money market funds are a major asset class, currently valued at over $7 trillion. Its adoption of asset tokenization could signal a broader industry shift toward leveraging blockchain tech.
