JPMorgan (JPM) is preparing to launch a tokenized money market fund, the latest sign that major Wall Street financial institutions and asset managers are accelerating their efforts to move traditional assets onto blockchain rails.
A Tuesday filing with the U.S. Securities and Exchange Commission (SEC) outlined plans for a blockchain-based money market fund that invests exclusively in short-term U.S. Treasury bonds, cash and overnight repurchase agreements backed by government securities.
The fund, called JPMorgan OnChain Liquidity-Token Money Market Fund (JLTXX), will maintain blockchain-based token balances linked to investors’ ownership records, allowing approved users to submit purchase, redemption and transfer requests over Ethereum, according to the document. The underlying blockchain infrastructure will be operated by Kinexys Digital Assets, JPMorgan’s blockchain unit formerly known as Onyx.
The fund is structured to satisfy reserve asset requirements under the GENIUS Act, legislation intended to regulate stablecoin issuers in the US that could position the product as a yielding reserve vehicle for stablecoin companies seeking regulatory-compliant Treasury exposure.
The move comes just days after BlackRock (BLK), the world’s largest asset manager, filed paperwork for a new tokenized Treasury reserve vehicle and blockchain-based shares of an 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. Supporters argue that the technology can reduce settlement times, improve transparency, and enable trading and use of collateral 24 hours a day.
The real-world tokenized asset market has grown more than 200% over the past year and now exceeds $32 billion, according to data from rwa.xyz. Treasury products have become one of the fastest-growing segments as institutions look for ways to earn returns on cash on-chain.
JPMorgan has been among the most active traditional banks in incorporating blockchain infrastructure into traditional finance. In December, the bank launched a tokenized money market fund called MONY on Ethereum, giving institutional investors blockchain-based access to short-term cash products. Through Kinexys, the bank has also processed tokenized collateral and settlement transactions for institutional clients.
