BNY & Goldman Sachs Unlock $5.7T Market with Tokenized Funds

BNY Mellon and Goldman Sachs have introduced tokenized money market funds (MMFs), leveraging blockchain technology to enable real-time settlement and enhance liquidity in a $5.7 trillion market. The collaboration, executed through BNY’s LiquidityDirect platform and Goldman’s GS DAP® blockchain, allows institutional investors to subscribe to and redeem MMF shares as digital tokens, marking a significant integration of traditional finance (TradFi) and crypto infrastructure. This initiative is backed by major asset managers, including BlackRock, Fidelity, and Federated Hermes, signaling growing institutional confidence in tokenized assets [1].

The tokenized MMFs operate via mirrored tokens on a permissioned private ledger, which represent ownership of traditional MMF shares. These tokens facilitate 24/7 market access, instant settlements, and programmable use cases such as collateral pledging. Unlike traditional MMFs, which often require T+1 or T+2 settlement periods, the blockchain-based approach reduces transaction times to seconds while maintaining regulatory compliance. Laide Majiyagbe, BNY’s Global Head of Liquidity, Financing, and Collateral, emphasized that this innovation “opens doors to scalable, secure real-time finance” [1].

Goldman Sachs’ GS DAP platform utilizes Digital Asset’s Canton blockchain technology to create these tokens, which are not currently tradeable on public markets. However, the platform is part of a broader Canton Network—a decentralized infrastructure backed by global financial institutions—suggesting potential future expansion to decentralized exchanges (DEXs) and cross-chain settlements. Mathew McDermott, Goldman’s Global Head of Digital Assets, noted that the tokens “unlock new utility as collateral and transferability,” with the current phase focused on institutional clients [1].

The move aligns with regulatory shifts, such as the 2025 GENIUS Act, which banned interest-bearing stablecoins, creating demand for regulated yield-generating alternatives. Tokenized MMFs offer a compliant solution for parking idle cash, attracting hedge funds, corporations, and traditional institutions. As of 2025, Moody’s projects record asset growth in this sector, reflecting its strategic value in a digital-native financial system [1].

This partnership represents a foundational shift in how capital moves, transforming traditionally siloed back-office systems into interoperable, real-time networks. By prioritizing institutional-grade security and regulatory readiness, BNY and Goldman are positioning tokenized MMFs as a bridge between TradFi’s stability and crypto’s speed. While the current focus remains on private networks, the long-term vision includes broader adoption, potentially integrating with DeFi platforms and public crypto rails.

Sources:

[1] [Wall Street Goes Crypto? BNY & Goldman Sachs Unlock $55T Market with Tokenized Funds](https://www.cryptoninjas.net/news/wall-street-goes-crypto-bny-goldman-sachs-unlock-55t-market-with-tokenized-funds/)