JPMorgan Chase (JPM) is preparing to launch a tokenized money market fund, the latest sign that major financial institutions and Wall Street asset managers are stepping up efforts to move traditional assets onto the blockchain track.
A filing with the U.S. Securities and Exchange Commission (SEC) on Tuesday outlined plans for a blockchain-based money market fund that would invest exclusively in short-term U.S. Treasuries, cash and overnight repurchase agreements backed by government securities.
The fund, known as the J.P. Morgan OnChain Liquid Token Money Market Fund (JLTXX), will maintain blockchain-based token balances tied to investor ownership records, allowing approved users to submit purchase, redemption and transfer requests via Ethereum, the filing said. The underlying blockchain infrastructure will be operated by JPMorgan Chase’s blockchain arm Kinexys Digital Assets, formerly known as Onyx.
The fund is structured to meet reserve asset requirements under the GENIUS Act, which regulates U.S. stablecoin issuers, which could position the product as a revenue reserve vehicle for stablecoin companies seeking to comply with Treasury debt exposure.
Just days ago, BlackRock (BLK), the world’s largest asset manager, filed documents for a new tokenized Treasury reserve facility and blockchain-based shares of its existing $7 billion money market fund.
Tokenization — the process of creating blockchain-based representations of traditional financial assets — has become one of the hottest trends in the financial and crypto markets. Proponents believe the technology could reduce settlement times, increase transparency and enable round-the-clock trading and collateral use.
The market for tokenized real-world assets has grown more than 200% in the past year and now exceeds $32 billion, according to rwa.xyz. Treasury products have become one of the fastest-growing market segments as institutions look for ways to earn income from on-chain cash.
JPMorgan Chase is one of the traditional banks most active in embedding blockchain infrastructure into traditional finance. In December last year, the bank launched a tokenized money market fund called MONY on Ethereum to provide short-term blockchain-based cash products to institutional investors. Through Kinexys, the bank also handles tokenized collateral and settlement transactions for institutional clients.