Goldman Sachs and BNY Mellon: The New Tokenized Money Market Fund Revolution!

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Ah, Wall Street, where innovation blooms like a posh, oversized flower in a concrete jungle! Two titans, Goldman Sachs and BNY Mellon, have set their sights on offering tokenized money market funds to institutional investors. Why? To offer something truly groundbreaking—real-time settlement, access at any hour of the day or night (because who needs sleep?), and efficiencies that could make even the most jaded financial wizard raise an eyebrow.

In a move that screams “We’re making history here,” BNY Mellon, the largest custodian bank on Earth (or so they say), will soon allow clients to invest in money market funds where ownership is securely recorded on Goldman Sachs’ private blockchain. Yes, you heard it—private blockchain, not the one your aunt uses to buy cat memes. A press release, which may or may not have been delivered with a flair of dramatic punctuation, spilled the beans on this groundbreaking news.

“As the financial system transitions toward a more digital, real-time architecture,” said Laide Majiyagbe, global head of liquidity, financing, and collateral at BNY Mellon (probably wearing an impressively serious suit), “BNY is committed to enabling scalable and secure solutions that shape the future of finance.” Phew, that was a mouthful, but it certainly sounds like they’ve got their digital ducks in a row.

And guess what? The cool kids of the financial world—BlackRock, Fidelity Investments, and Federated Hermes—are hopping onto this blockchain bandwagon, along with the asset management arms of both Goldman and BNY. It’s like the Avengers of the finance world, but with more spreadsheets and less spandex.

Ban on interest-bearing stables to spur growth in tokenized funds

Not to be left out, the freshly minted GENIUS Act (yes, they named it that) has passed through the halls of Congress. The Act, which establishes a regulatory framework for stablecoins in the U.S., bans interest-bearing stablecoins. Think of it as a superhero who’s saving us from the evils of too much interest. Meanwhile, tokenized money market funds are thriving—offering yield (that’s right, folks, actual yield!) and serving as a shiny new toy for hedge funds, pensions, and corporations to play with. The beauty? Minimal volatility, which sounds like a dream for anyone who’s watched their stocks do the cha-cha dance recently.

In a cheeky move, Moody’s reported last month that tokenized short-term funds have ballooned to $5.7 billion in assets since 2021. And all of this? A natural consequence of traditional asset managers, insurers, and brokerages finally realizing that they can offer clients access between fiat and digital markets. Who says old dogs can’t learn new tricks?

Usually backed by US Treasuries or other safe investments (we like safe), these funds aren’t all that different from traditional money market funds. Except, you know, they’re leveraging the wonders of blockchain to issue fractional shares and offer instant settlement. Because why not make finance more… futuristic?

Race to bring capital markets on blockchain is on

Meanwhile, Robinhood’s CEO, Vlad Tenev, decided to spice things up by unveiling plans for “Robinhood Chain”—an Ethereum-compatible layer 2 on Arbitrum Orbit. What’s that? A blockchain that lets users trade tokenized derivatives of stocks directly on the blockchain, freeing the financial world from the chains of traditional exchange hours. As if we weren’t already living in a world where you can buy sneakers at 3 AM.

In a report from July 4 (because who doesn’t want fireworks with their blockchain news?), Galaxy Digital claimed that Robinhood’s move to tokenization is a direct challenge to the long-standing dominance of traditional exchanges like the NYSE. If this keeps up, the old guard might find themselves standing in line at the metaphorical retirement home for stock exchanges. “This directly challenges the deep concentration of liquidity and activity that gives major TradFi exchanges (e.g., NYSE) their competitive advantage,” Galaxy Digital smugly noted. Touché, indeed.

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2025-07-23 15:53