BNY Mellon and Goldman Sachs Pioneer Tokenized Money Market Funds, Unlocking $7.1 Trillion Industry on Blockchain

In a milestone for the $7.1 trillion money market fund (MMF) industry, BNY Mellon (NYSE: BK) and Goldman Sachs (NYSE: GS) have launched a blockchain-based solution that tokenizes MMFs for institutional investors.

Announced on July 23, the initiative integrates BNY Mellon’s LiquidityDirect platform with Goldman Sachs’ GS DAP blockchain, enabling real-time access to tokenized shares from major asset managers, including BlackRock (NYSE: BLK), Fidelity, and Federated Hermes.

How It Works

• Investors use LiquidityDirect as usual, selecting a digital fund class for tokenized MMFs.

• BNY acts as custodian, transfer agent, and tokenization manager, triggering minting/burning of "mirror tokens" on GS DAP, all while maintaining traditional books and records.

• GS DAP—powered by Digital Asset’s Canton tech—records token ownership in a private permissioned blockchain environment.

Institutional Impact and Regulatory Tailwinds

The tokenization of money market funds opens up clear advantages for institutional investors: 24/7 access, near-instant settlement, real-time transparency, and the potential to use tokenized MMF shares as collateral in financial markets. This mirrors the approach pioneered by BlackRock's BUIDL tokenized Treasury product, reflecting a broader shift toward on-chain financial instruments and programmable liquidity.

The initiative arrives at a critical regulatory inflection point. The GENIUS Act, signed into law on July 18, 2025, provides comprehensive clarity for digital assets and tokenized dollars, catalyzing the transition from traditional vehicles to compliant, yield-bearing blockchain-native alternatives. This clarity is crucial for unlocking adoption among conservative institutional allocators.

“Mirrored tokenization of MMF shares is a first step in this transition—empowering clients to navigate this transformation with confidence,” said Laide Majiyagbe, Global Head of Liquidity, Financing & Collateral at BNY Mellon.

Mathew McDermott, Global Head of Digital Assets at Goldman Sachs, echoed the sentiment: “Using tokens would enable us to unlock their utility as collateral and open up more seamless transferability in the future.”

Strategic Outlook: Building the Foundation for Tokenized Finance

The first phase of the initiative focuses on issuing and redeeming tokenized MMF shares within a permissioned blockchain framework. However, future stages could bring advanced use cases, including cross-chain interoperability, public network connectivity, and integration with decentralized financial protocols for margining, collateral management, or cross-border settlement.

Ultimately, the BNY-Goldman collaboration is more than just a product—it’s a blueprint for how traditional financial infrastructure can evolve through blockchain. By combining regulated custodianship with programmable assets, the initiative lays a foundation for scalable, compliant, and efficient financial tokenization at the institutional level.