Goldman Sachs, BNY Mellon Collaborate on Tokenized Money Market Product

In brief

BNY Mellon and Goldman Sachs are working together on a tokenized money market fund (MMF) product.
The product will allow fund managers to subscribe to MMF shares that earn a tokenized representative.
The goal is to unlock utility and transferability of MMF shares.

Publicly traded financial giants BNY Mellon Corporation and Goldman Sachs Group are collaborating on a tokenized money market product to improve utility and transferability of money market fund (MMF) shares, they said Wednesday.

The product, built with technology developed by Goldman Sachs, will allow fund managers to enable the subscription of shares of MMF via BNY’s Liquidity Direct and digital assets platform that are then reflected with mirrored tokens on Goldman Sachs’s Digital Asset Platform (DAP).

“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 Global Head of Liquidity, Financing and Collateral at BNY Laide Majiyagbe in a statement.

“Mirrored tokenization of MMF shares is a first step in this transition, and we are proud to be at the forefront of this first-of-its-kind initiative,” she added.

The initial launch will have participation from BlackRock, BNY Investments Dreyfus, Federated Hermes, Fidelity Investments, and Goldman Sachs Asset Management, while the official books, records, and settlement will be maintained by BNY Mellon.

“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,” said Goldman Sachs Global Head of Digital Assets Matthew McDermott, in a statement. “We are excited about this strategic collaboration with BNY in our journey towards the longer-term vision for GS DAP and as we continue to lead and innovate in the digital assets space.”

Expanding participation in global financial services via tokenized assets is a growing trend among financial firms. Last month, Robinhood announced a tokenized equity platform to provide greater access to American stocks for those in the Europe, and American crypto exchange Coinbase is seeking to offer its own tokenized solution as well.

Meanwhile, other crypto exchanges have leaned into offering xStocks, a feature that allows users to trade popular stocks like Meta and Tesla on Solana, which are backed by actual shares in the respective companies.