BNY, Goldman Sachs ink tokenized money market fund deal to bring $7.1 trillion industry onchain

Bank of New York Mellon and Goldman Sachs on Wednesday launched a blockchain-based system that issues “mirror” tokens of money market fund shares, letting institutional investors subscribe and redeem through BNY’s LiquidityDirect platform while ownership is recorded on Goldman’s GS DAP ledger, marking the first U.S. rollout of tokenized MMF shares by major lenders.

Under the initiative, BNY will keep the official books and settlement records for participating funds, which reportedly already includes products from BlackRock, Fidelity, Federated Hermes, BNY’s Dreyfus unit, and Goldman Sachs Asset Management. BNY will also create digital token representations simultaneously, designed to boost collateral mobility and transferability. 

The project targets a $7.1 trillion money market industry and arrives a week after President Donald Trump signed the GENIUS Act, establishing the first federal framework for U.S. stablecoins. Policymakers are also working on a crypto market structure bill that they say should broaden access to regulated digital asset services.

Unlike traditional money markets that trade during limited market hours, tokenized funds enjoy round-the-clock availability and expansive liquidity features because they sit on a blockchain network.

Mathew McDermott, Goldman Sachs' global head of digital assets, said tokenizing MMF shares could unlock their use as collateral and pave the way for faster, more seamless moves across markets. The Goldman exec sees it as part of a longer-term push to modernize market plumbing, while BNY framed the project as a step toward a real-time financial architecture. "Mirrored tokenization of MMF shares is a first step in this transition," Laide Majiyagbe, global head of liquidity, financing, and collateral at BNY, said.

It’s the first time major banks have ventured into blockchain-based money markets, but the tokenization trend has already attracted notable traditional finance players. Onchain products like BlackRock’s BUIDL and Franklin Templeton’s BENJI collectively command over $3 billion in assets, while the total real-world asset value in DeFi has exceeded $10.7 billion according to The Block’s data dashboard.

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