Goldman Sachs & BNY Mellon Shatter Barriers With First US-Regulated Tokenized Money Market Funds
Wall Street's sleeping giants just woke up—and they're playing with blockchain now.
Goldman Sachs and BNY Mellon drop the mic with the first SEC-approved tokenized money market funds. No more whispers about 'crypto experiments'—this is institutional adoption on a silver platter.
Why it matters: The pipes of traditional finance just got a DeFi upgrade. Tokenization cuts settlement times from days to minutes, bypasses middlemen, and—let's be real—gives these banks a fighting chance against fintech disruptors.
The cynical take: Nothing gets legacy finance moving like the fear of missing out on fee revenue. But hey, we'll take progress however it comes.
Bottom line: The dam's breaking. When the old guard starts building on-chain, the 'crypto vs. TradFi' war becomes a collaboration—with investors winning biggest.
TLDR
- Goldman Sachs and BNY Mellon launched the first U.S. tokenized money market funds on July 23, 2025
- The system uses BNY’s LiquidityDirect platform and Goldman’s Digital Asset Platform for real-time blockchain settlement
- Major firms including BlackRock, Fidelity, and Federated Hermes have joined the rollout
- The launch follows President Trump signing the GENIUS Act on July 18, which created federal stablecoin regulations
- Tokenized funds allow instant trading and enable shares to be used as collateral without selling
Goldman Sachs and Bank of New York Mellon made history this week by launching the first tokenized money market funds in the United States. The announcement came on July 23, 2025, just days after new federal crypto laws took effect.
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
— BNY (@BNYglobal) July 23, 2025
The two Wall Street giants created a system that lets institutional investors buy and trade money market fund shares using blockchain technology. This marks a first for U.S. fund managers offering blockchain-based investment products.
The new platform works through BNY’s LiquidityDirect system, which connects to Goldman Sachs’ Digital Asset Platform (DAP). When investors buy fund shares, Goldman creates digital tokens that mirror the real shares on their blockchain network.
BNY Mellon continues managing the underlying funds using traditional methods. The tokens simply create a digital record that matches the actual shares held in custody accounts.
Real-Time Trading and Collateral Benefits
The blockchain system enables instant settlement that works 24 hours a day. Traditional money market funds can take up to two business days for investors to access their money after selling shares.
Matthew McDermott, Goldman’s global head of digital assets, explained the key advantage. Instead of selling fund shares to get cash for collateral, investors can transfer the digital tokens directly.
This change could unlock billions of dollars currently tied up in settlement delays. Money market funds hold $7.1 trillion in total assets across the industry.
Laide Majiyagbe, BNY’s global head of liquidity, said the system removes friction that exists in traditional markets. The tokenized approach allows for improved asset transferability and operational efficiency.
Major asset managers have already signed up to use the new system. BlackRock, Fidelity Investments, and Federated Hermes are among the firms participating in the initial rollout.
Legal Framework Enables Launch
The timing of this launch connects directly to recent regulatory changes. President TRUMP signed the GENIUS Act into law on July 18, creating the first federal framework for stablecoins.
The new law requires companies issuing digital currencies to back them with real dollars or Treasury bills. This regulatory clarity gave banks permission to develop blockchain-based financial products.
Trump called the legislation “the greatest revolution in financial technology since the birth of the Internet” when signing it. Goldman and BNY had been waiting for this regulatory approval before launching their platform.
The GENIUS Act also prohibits interest-bearing stablecoins, making tokenized money market funds more attractive. These blockchain-backed funds offer similar benefits to stablecoins while providing yield to investors.
Tokenized funds backed by U.S. Treasuries are expected to attract hedge funds, pension plans, and asset managers. The low volatility and yield potential make them suitable for institutional portfolios.
BNY Mellon serves as the custodian bank, holding approximately $2.9 trillion in assets under the International Central Securities Depository model. The firm provides fund accounting, custody, and transfer agency services for the tokenized products.
The broader tokenized Treasury market has grown almost 500% in the past year. Total value across all tokenized Treasury products reached $4.77 billion as of July 2025.
Goldman plans to eventually spin off their GS DAP platform to become industry-owned infrastructure. This WOULD allow different financial companies to work together more seamlessly on blockchain-based products.
BNY Mellon was also recently appointed by Goldman Sachs Asset Management to provide asset services for European UCITS ETF products launched in 2019.
