BREAKING: Goldman Sachs & BNY Mellon Bet Big on Crypto With Tokenized Money Market Funds

Wall Street's old guard just placed its biggest crypto bet yet. Goldman Sachs and BNY Mellon—two titans of traditional finance—have launched tokenized money market funds, bridging the gap between legacy systems and blockchain's promise.

Why this matters: When institutions holding $10 trillion in combined assets dive into tokenization, it's not a test—it's a surrender to inevitability.

The fine print: These aren't your anarchic DeFi playgrounds. Expect KYC gates, SEC-friendly structures, and all the compliance trappings that make crypto purists groan. But for institutional money? This is the on-ramp they've been waiting for.

Cynic's corner: Nothing accelerates innovation like watching your competitors eat your lunch. Welcome to finance's future—where banks finally move faster than tectonic plates.

• Goldman and BNY launch tokenized MMFs with real-time blockchain-based settlement.
• Institutions access tokenized funds via BNY LiquidityDirect and Goldman’s Digital Asset Platform.
• BlackRock and Fidelity join rollout as tokenization gains traction among top asset managers.

Goldman Sachs and BNY Mellon have entered into a strategic partnership to enable institutional investors to access tokenized money market funds (MMFs). The program allows clients to trade the shares of these funds with blockchain infrastructure, introducing real-time settlement and improved asset transferability.

The tokenized MMFs will be available through LiquidityDirect platform utilized by BNY Mellon and will integrate with Goldman Sachs’ proprietary Digital Asset Platform (DAP).  Through this association, mirrored digital tokens that reflect real MMF shares can be issued and tracked on-chain. These tokens are fully supported and synchronized with official records held by BNY Mellon, the largest custodian bank in the world.

BNY’s LiquidityDirect and @GoldmanSachs’ Digital Asset Platform have collaborated to launch tokenized money market funds (MMFs).

This significant initiative sets our clients on a path to access a new capability to increase the utility and potential transferability of MMFs in… pic.twitter.com/WJ1lv7m6T4

Matthew McDermott, Goldman Sachs’ Global Head of Digital Assets, emphasized that the solution enhances MMF utility by unlocking collateralization and smoother fund transfers. He said, “Using tokens representing MMF shares allows us to enable new operational efficiencies and broaden collateral use cases.”

BNY Mellon Provides Asset Services for European ETFs

In a related move, BNY Mellon was appointed by Goldman Sachs Asset Management (GSAM) to provide comprehensive asset services for its newly launched European UCITS ETF range. The first fund, the Goldman Sachs ActiveBeta® U.S. Large Cap Equity UCITS ETF, launched on September 26, 2019, under the ICAV structure.

BNY Mellon will deliver services including fund accounting, custody, transfer agency, and common depository under the International Central Securities Depository (ICSD) model. The firm currently services approximately $2.9 trillion in ICSD model assets, positioning it as a key infrastructure provider amid evolving post-Brexit regulations in the UK and Ireland.

Peter Thompson, Head of GSAM’s European ETF Business, noted that the partnership aligns with the firm’s strategy to provide simple and diversified ETF products. “We’re pleased to work with BNY Mellon as we expand our European ETF suite,” he said.

Robert Rushe, Head of ETF Services EMEA at BNY Mellon, added that the collaboration reflects the firm’s scale, technology, and commitment to global ETF growth.

Tokenization Gains Institutional Momentum

A broader movement to tokenization is also gaining momentum in the largest financial institutions. Other funds, such as BlackRock, Fidelity Investments, and Federated Hermes, are among those engaging in the tokenized MMF release, along with Goldman Sachs and BNY Mellon.

The potential benefits of tokenized funds versus stablecoins increase due to the prohibition of interest-bearing stablecoins, under the GENIUS Act. These blockchain-backed MMFs with U.S. Treasurys backing are expected to have low volatility and yield and are likely to be utilized by hedge funds, pensions, and asset managers.

Laide Majiyagbe, the Global Head of Liquidity at BNY, said, “This marks a critical step as finance evolves toward digital, real-time architecture.” The issuance of tokenized instruments suggests that the capital markets infrastructure may improve transparency, efficiency and liquidity.