JPMorgan Chase & Co.'s asset management arm is launching its first ever tokenized money market fund built on Ethereum, joining a growing list of Wall Street firms pushing into blockchain-based finance.
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The New-York based bank on Monday debuted the My OnChain Net Yield Fund, or MONY, a private fund supported by JPMorgan's tokenization platform, Kinexys Digital Assets, according to a press release. MONY, open to qualified investors, allows them to earn yield while holding the token on the blockchain.
The move comes as the biggest firm on Wall Street push deeper into tokenization, which involves turning conventional assets — stocks, bonds or private loans — into blockchain-based tokens that confer fractional ownership. Many financial firms have experimented with blockchain investing for years. Recently, activity has since picked up following the passage of the Genius Act in the US, which sets out rules for stablecoins, another fast-growing category of digital money.
Tokenization has been touted as a way to make financial markets faster, cheaper and more transparent. In theory, tokenized funds could offer near-instant settlement and disintermediate legacy infrastructure. But that vision remains largely theoretical.
The tokenized vehicle has a minimum investment of $1 million investment minimum, according to The Wall Street Journal, which was first to report the news. JPMorgan plans to seed the fund with $100 million of its own capital, per WSJ, then open it to outside investors.
"Tokenization can fundamentally change the speed and efficiency of transactions, adding new capabilities to traditional products," wrote John Donohue, head of global liquidity at J.P. Morgan Asset Management.
The launch comes as the bank itself in August wrote that the market for tokenized real-world assets — long touted as crypto's bridge to mainstream finance — remains small, largely driven by crypto-native firms rather than Wall Street incumbents. For all the hype, strategists led by Nikolaos Panigirtzoglou wrote that the total tokenized asset base remains "rather insignificant."
Still, firms are experimenting. HSBC Holdings Plc just last month announced plans to start offering tokenized deposits to its corporate clients. Bank of New York Mellon Corp. and Goldman Sachs Group Inc. in July announced a collaboration to use blockchain technology to maintain an ownership record of money market funds.
Fidelity Investments filed for an "on-chain" share class of its Treasury money market fund this year and other major banks — including Deutsche Bank AG, Citigroup Inc., Banco Santander SA — are also exploring how digital assets can make payments quicker and more efficient. BlackRock Inc.'s digital liquidity fund, BUIDL, continues to dominate, with assets peaking at $2.9 billion.
