Goldman Sachs and BNY Mellon are collaborating to bring institutional investors into the next era of finance by offering tokenized money market funds.
The initiative will allow clients to invest in funds whose ownership is recorded on Goldman Sachs’ private blockchain, a move expected to increase efficiency and offer 24/7 market access.
According to a joint announcement released Wednesday, clients of BNY Mellon—the world’s largest custodian bank—will be among the first to benefit from this service.
“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 Laide Majiyagbe, global head of liquidity, financing, and collateral at BNY.
Industry Giants Join the Push for Tokenized Assets
The project is backed by several major financial players including BlackRock, Fidelity Investments, and Federated Hermes.
Goldman Sachs Asset Management and BNY Mellon Investment Management are also involved, underscoring the scale and ambition of the plan.
The tokenized funds are structured similarly to traditional money market funds, typically backed by low-risk assets like U.S. Treasurys.
However, by leveraging blockchain technology, they offer features such as fractional ownership and real-time settlement, a significant upgrade over legacy systems.
Legislative Developments Fuel Momentum
This financial innovation comes shortly after the U.S. passed the GENIUS Act, a bill that sets new standards for stablecoins and bans interest-bearing versions of them.
The legislative shift opens new doors for tokenized money market funds, which can provide yield without falling under the same restrictions.
For institutional investors like hedge funds and pension plans, these instruments offer a compelling way to manage idle cash with reduced volatility.
A Moody’s report last month revealed that tokenized short-term funds have ballooned to $5.7 billion in assets since 2021.
Blockchain Adoption Gathers Pace Across Finance
The move by Goldman Sachs and BNY is part of a broader trend of traditional finance institutions exploring blockchain technology.
Earlier this month, Robinhood unveiled plans for “Robinhood Chain,” an Ethereum-compatible Layer 2 chain on Arbitrum Orbit, enabling users to trade tokenized derivatives outside of traditional market hours.
According to Galaxy Digital, this trend marks a significant departure from the old financial infrastructure and a step toward decentralizing capital markets.
As more major players adopt these technologies, the competitive edge of traditional exchanges like the NYSE could erode.