Goldman Sachs & BNY Mellon Collab Unleashes $7T Money Market On-Chain – Crypto Just Got Institutional Jet Fuel

Wall Street's sleeping giants just woke up to crypto—with a vengeance.

The $7 Trillion Infusion

Goldman Sachs and BNY Mellon are bridging TradFi's deepest liquidity pool to blockchain. Money market funds—the boring cash cows of finance—are getting a defi makeover.

Why Now?

With yields compressing and regulators circling, the old guard finally admits what degens knew for years: tokenization isn't optional. Even bankers need 24/7 markets when the printing press slows.

The Cynic's Take

Watch the same suits who called crypto 'rat poison' in 2018 now repackage T-bills as 'yield-bearing NFTs'—innovation at its most ironic.

One thing's certain: when custody giants and bulge brackets move, the dominoes fall fast. The question isn't if legacy finance adopts crypto, but how many middlemen get cut out along the way.

Blockchain Integration to Expand MMF Utility

The mirrored tokenization of MMF shares using blockchain represents a new model for fund management infrastructure. Although the underlying assets remain managed through traditional custodial and compliance channels, the blockchain layer enhances interoperability and real-time transferability.

Goldman Sachs’ GS DAP®, is built on smart contract technology from the startup Digital Asset and offers programmable finance functionality for institutions.

BNY Mellon’s LiquidityDirectSM platform is also one of the leading portals for institutional cash investors, and the integration of the private blockchain opens the door to extending MMF shares into use cases like collateral optimization and intraday liquidity management.

According to Laide Majiyagbe, BNY Mellon’s Global Head of Liquidity, Financing and Collateral, “Mirrored tokenization of MMF shares is a first step in this transition,” noting the company’s position as a LINK between established financial systems and new technology.

GS DAP® was previously piloted for bond issuance on blockchain networks in Asia and Europe. Its adaptation for MMF share representation in the US signals a broader vision for tokenizing real-world assets beyond equities and debt, potentially reshaping capital markets infrastructure.

This particular use case focuses on liquidity and settlement efficiency in short-term investment vehicles, valued at over $7 trillion globally, according to ICI data.

A Step Toward Collateral Utility and Global Scalability

Mathew McDermott, Global Head of Digital Assets at Goldman Sachs, emphasized the potential benefits of using tokenized MMF shares as collateral in various trading and settlement contexts.

“Using tokens representing the value of shares of Money Market Funds on GS DAP® WOULD enable us to unlock their utility as a form of collateral and open up more seamless transferability in the future,” he said in a statement.

BNY Mellon will continue to serve as the official recordkeeper, maintaining existing regulatory compliance and settlement protocols. However, the addition of tokenized mirrors creates new flexibility for financial institutions seeking to modernize collateral management and liquidity strategies.

While this initiative currently focuses on US MMFs, both institutions signaled interest in expanding the model globally, potentially applying similar technology to other fund structures and asset classes.

Featured image created with DALL-E, Chart from TradingView