Financial giants Goldman Sachs and Bank of New York Mellon will launch a service allowing institutional investors to buy tokens linked to money market funds, reports Reuters. This is another step by Wall Street to bring blockchain technology into traditional finance - amid growing optimism about the crypto industry thanks to the passage of the Stablecoin Regulation Act, the agency commented. BlackRock, Fidelity, Federated Hermes, and the investment units of Goldman and BNY Mellon have already joined the project.

Tokenization of money market funds, which CNBC estimates have $7.1 trillion invested in, means investors will be able to buy and sell shares in such funds on a special LiquidityDirect platform, with a digital record created in Goldman Sachs' blockchain system, meaning ownership will be recorded, the two financial corporations explained. If widely implemented, it could simplify the use of these assets as collateral for transactions and reduce settlement times, Reuters predicts.

Money market funds invest in reliable short-term instruments - government bonds, repos and commercial paper. During the period of high interest rates, capital inflows into them from institutional and retail investors have increased dramatically. Tokens linked to such funds, unlike stablecoins, will be able to generate income and become an attractive alternative for hedge funds, pension systems and corporations, considers CNBC.

"We have created the ability to invest in tokenized fund shares from different fund management companies," noted BNY Mellon's Lyde Majiyagbe. - This will provide seamless and more efficient transactions than traditional ones." 

"The scale of this market is a huge opportunity to improve the efficiency of the entire financial infrastructure,", said Goldman Sachs head of digital assets Matthew McDermott. 


This article was AI-translated and verified by a human editor

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