Goldman Sachs BNY Mellon Tokenize Money-Market Shares in $7 Trillion Industry Transformation

The collaboration between Goldman Sachs Group Inc. and Bank of New York Mellon Corp. to tokenize shares of money-market funds marks a transformative development in the $7 trillion industry, according to JPMorgan Chase & Co. strategists. The initiative, announced recently, enables institutional investors to access digital representations of 2a-7-regulated money-market fund shares, maintaining traditional settlement frameworks while expanding the utility of cash assets. BNY Mellon will retain oversight of fund records and settlements under existing regulatory guidelines, ensuring compliance with stringent investment safeguards [1].

The move, involving major fund providers like BlackRock, Dreyfus, Federated Hermes, Fidelity, and Goldman Sachs—collectively managing 46% of taxable money-market assets—reflects growing interest in blockchain’s potential to modernize financial infrastructure. JPMorgan analysts describe the effort as a “significant leap forward,” highlighting its role in enhancing money funds’ competitiveness against stablecoins and unlocking new applications such as collateral for margin requirements [1]. Teresa Ho, a JPMorgan strategist, emphasized that tokenized money-market shares could replace traditional collateral like cash or Treasuries without sacrificing interest income, underscoring the asset class’s versatility [1].

The tokenization trend aligns with broader Wall Street efforts to integrate blockchain technology into traditional finance. Institutions are exploring digital-asset use cases to address inefficiencies in legacy systems, including delayed settlements and opaque ownership tracking. By tokenizing assets, the industry aims to achieve real-time liquidity and 24/7 settlement capabilities, streamlining operations for institutional clients [3]. The partnership follows the recent passage of the GENIUS Act, a legislative framework for stablecoin regulation requiring 1-to-1 backing with high-quality assets, further legitimizing the sector [1].

JPMorgan’s analysis underscores the urgency for innovation as money funds navigate evolving market dynamics. Despite inflows of $276 billion in 2025, driven by the Federal Reserve’s monetary policy, strategists warn that delayed action could erode cash’s dominance. “Cash will lose its crown” if the industry fails to adapt, according to State Street Global Advisors’ CEO Yie-Hsin Hung, who highlighted tokenization as a critical enabler for the future [1].

The initiative also intersects with broader digital-asset trends, including banks’ exploration of deposit tokens and crypto loan programs. JPMorgan’s recent hiring of George Giatrakos, a former Citibank private equity dealmaker, signals the bank’s commitment to expanding its digital-asset footprint. While regulatory clarity and standardized frameworks remain challenges, the collaboration with Goldman Sachs and BNY Mellon represents a strategic step toward integrating tokenized assets into traditional finance [2].

As the market evolves, JPMorgan anticipates further developments in stablecoin integration and real-world asset tokenization, with banks, asset managers, and payment processors positioning themselves to capitalize on the sector’s potential. The partnership’s success could set a precedent for broader adoption, reshaping global capital markets through enhanced efficiency and accessibility [2].

Sources:

[1] [Money Funds Take Major Leap in Tokenization Deal, JPMorgan Says](https://www.bloomberg.com/news/articles/2025-07-25/money-funds-take-major-leap-in-tokenization-deal-jpmorgan-says)

[2] [Banking giants bet on tokenized funds and crypto loans](https://news.bit2me.com/en/Wall-Street-accelerates-its-digital-transformation)

[3] [Crypto Tokens | Latest News and Top Stories](https://cointelegraph.com/tags/tokens)