Goldman Sachs and BNY Launch Tokenized Money Market Funds with Blockchain for 24/7 Trading and Real-Time Settlements

Goldman Sachs and Bank of New York Mellon (BNY) have launched tokenized money market funds, leveraging blockchain technology to enable real-time settlements and 24/7 trading. The initiative, facilitated through BNY’s LiquidityDirect platform and powered by Goldman’s private blockchain, allows institutional investors to tokenize ownership of money market fund shares. This marks a significant step toward modernizing capital markets, offering faster, more secure transactions while maintaining regulatory compliance [1].

The collaboration involves major financial institutions, including BlackRock, Fidelity Investments, and Federated Hermes, as early participants. By recording ownership on a blockchain, the tokenized funds enable fractional share trading and automated settlements, addressing liquidity challenges for hedge funds, pension funds, and corporations. Laide Majiyagbe, BNY’s global head of liquidity, emphasized the move as a foundational effort to build a “more digital, real-time architecture” in finance, bridging traditional systems with emerging technologies [2].

Goldman Sachs’ Digital Assets division highlighted the potential for tokenized fund shares to serve as collateral in other trades, streamlining cross-border transactions and enhancing capital efficiency. Matthew McDermott, the firm’s head of digital assets, noted that this innovation could unlock new use cases for money market funds, such as dynamic collateral management and instant access to liquidity [3].

The launch aligns with the recent enactment of the GENIUS Act, a regulatory framework that prohibits interest-bearing stablecoins while creating a legal pathway for tokenized assets. This legislative shift has positioned tokenized money market funds as a regulated alternative to speculative crypto products, with assets under management in tokenized short-term funds reaching $5.7 billion since 2021 [4]. Unlike stablecoins, these funds are anchored to low-risk instruments like U.S. Treasuries, ensuring stability while leveraging blockchain’s operational advantages [5].

Critics have raised concerns about potential regulatory gaps, arguing that tokenization could enable firms to circumvent investor protections. However, the collaboration’s focus on institutional-grade liquidity and compliance suggests a measured approach to digital innovation. Moody’s analysts note that traditional asset managers and insurers are increasingly adopting hybrid financial instruments to bridge fiat and digital markets, reflecting a broader trend toward tokenization in capital markets [6].

The initiative also signals a strategic shift by Wall Street giants to integrate blockchain technology into core financial infrastructure. Competitors like Robinhood are exploring blockchain-based derivatives, indicating a competitive race to redefine settlement systems. Analysts predict that if successful, similar models could gain traction across asset classes, from fixed income to equity trading [7].

For now, the partnership underscores the maturation of tokenization as a practical tool rather than a speculative experiment. While challenges remain—such as investor education and cross-jurisdictional regulatory alignment—the move demonstrates how legacy institutions can collaborate with new technologies to enhance efficiency and accessibility [8].

Source:

[1] [Goldman and BNY Team Up to Tokenize Money-Market Funds](https://www.wsj.com/finance/investing/goldman-and-bny-team-up-to-tokenize-money-market-funds-4d01b4d5)

[2] [BNY, Goldman Sachs Roll Out Tokenized Money Market Funds](https://www.coindesk.com/business/2025/07/23/goldman-sachs-and-bny-mellon-team-up-for-tokenized-money-market-funds)

[3] [Goldman Sachs, BNY Introduce Money Market Fund Digital Tokens](https://www.cnbc.com/2025/07/23/goldman-sachs-bny-money-market-fund-digital-tokens.html)

[4] [BNY's LiquidityDirect Portal Announces Plans to Tokenize](https://cranedata.com/archives/all-articles/10928/)

[5] [Goldman, BNY to Launch Tokenized Money Market Funds](https://cointelegraph.com/news/goldman-bny-tokenized-money-market-funds-launch)

[6] [Tokenized TradFi: BNY, Goldman Launch Blockchain Solution](https://www.pymnts.com/blockchain/2025/making-sense-of-tokenized-tradfi-as-bny-goldman-launch-blockchain-solution/)

[7] [Race to Bring Capital Markets on Blockchain is On](https://cointelegraph.com/news/goldman-bny-tokenized-money-market-funds-launch)

[8] [Ban on Interest-Bearing Stables to Spur Growth in Tokenized Funds](https://cointelegraph.com/news/goldman-bny-tokenized-money-market-funds-launch)