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Analysts at the financial giant JPMorgan Chase think Goldman Sachs’ new partnership with BNY is a “significant leap forward” for tokenized money market funds, according to a new Bloomberg report.
Goldman and BNY recently announced a joint venture to launch tokenized money market fund services using a blockchain developed by Goldman.
BlackRock, BNY Investments Dreyfus, Federated Hermes, Fidelity Investments and Goldman Sachs Asset Management all plan to participate in the launch of the new service.
Teresa Ho, a managing director at JPMorgan, tells Bloomberg the partnership could expand the use cases for money market funds.
“The true takeaway from this is beyond the typical way we see money funds being used as a cash management asset class — they can now use it as collateral. Instead of posting cash, or posting Treasuries, you can post money-market shares and not lose interest along the way. It speaks to the versatility of money funds.”
Ho also notes that numerous other financial firms see the potential benefit of tokenization amid blossoming regulatory clarity.
“This is true across banks, asset managers, and payment processors. We wouldn’t be surprised to continue to see more developments with respect to stablecoins being more integrated with the traditional financial system, as well as more tokenization of real-world assets.”
