JPMorgan Prepares to Launch First Tokenized Money Market Fund

J.P. Morgan Chase is reportedly deepening its blockchain efforts with its first tokenized money market fund.

The bank’s asset management unit is deploying the fund on the Ethereum blockchain, the Wall Street Journal (WSJ) reported Monday (Dec. 15), adding that J.P. Morgan will seed the fund using $100 million of its own capital before opening it to outside investors Tuesday (Dec. 16).

According to the report, the private “My OnChain Net Yield Fund” (MONY) is supported by J.P. Morgan’s tokenization platform, Kinexys Digital Assets, and will be open to investors with at least $5 million in investments and institutions with a minimum of $25 million. The fund requires a minimum investment of $1 million, the report added.

As the WSJ notes, Wall Street banks have expanded their tokenization projects in the wake of the GENIUS Act, which passed earlier this year and provides regulations for stablecoins.

“There is a massive amount of interest from clients around tokenization,” said John Donohue, head of global liquidity at J.P. Morgan Asset Management. “And we expect to be a leader in this space and work with clients to make sure that we have a product lineup that allows them to have the choices that we have in traditional money-market funds on blockchain.”

The bank’s analysts had written in July that the tokenization of shares of money market funds could help keep those funds competitive with stablecoins and create new uses for them.

Those comments followed an announcement of a partnership between BNY and Goldman Sachs, in which the former bank would use the latter’s blockchain technology to maintain a record of customers’ ownership of select money market funds (MMFs).

The companies called the project “a significant step towards enhancing the utility and transferability of existing MMF shares.”

J.P. Morgan also recently announced a tokenized a private-equity fund on its blockchain platform for the wealthy clients at its private bank. Weeks later, it introduced JPM Coin, a deposit token for institutional customers.

This is all taking place at a moment when, as PYMNTS noted in a recent report, blockchain technology is beginning to shift from a crypto-specific concept into a potential component of banking’s central infrastructure.

“Once the domain of startups, it is now part of how global institutions such as Citi, J.P. Morgan, Visa and others are exploring the future of payments and liquidity management,” that report said. “From tokenized deposits and programmable payments to the settlement of digital assets, the technology previously seen as a niche outlier is increasingly being considered as part of the operating system for modern finance.”