tl;dr
The Bank of New York Mellon Corporation and Goldman Sachs Group have partnered to advance the tokenization of Money Market Funds using Goldman Sachs' blockchain technology. This U.S. first allows fund managers and major firms like BlackRock and Fidelity to enable subscription and redemption of MMF s...
The Bank of New York Mellon Corporation (BNY) and Goldman Sachs Group have announced a pioneering collaboration to enhance the tokenization of financial assets, focusing on Money Market Funds (MMFs). This initiative leverages blockchain technology developed by Goldman Sachs to create mirrored tokenized records of MMF shares through BNY's LiquidityDirectSM and Digital Asset platforms, represented via the GS DAP® system.
This innovative solution marks the first instance in the U.S. where fund managers allow subscription and redemption of MMF shares through tokenization, involving major participants such as BlackRock, BNY Investments Dreyfus, Federated Hermes, Fidelity Investments, and Goldman Sachs Asset Management. Investors can now use BNY’s well-established LiquidityDirectSM platform, integrated with GS DAP®, to seamlessly subscribe to and redeem these funds.
The mirrored tokens created via GS DAP® utilize award-winning technology that enhances the utility and transferability of MMF shares, aiming to bring real-time digital finance architecture to traditional financial products. BNY will maintain official records and settlements, adhering to current guidelines, while pioneering mirror token issuance with a vision to expand globally.
Leaders from both firms emphasize that this collaboration represents a critical step towards integrating scalable, secure digital solutions in finance. By unlocking MMF token utility as collateral and facilitating easy transferability, this strategic partnership ushers in a new era of efficiency and innovation in digital capital markets, bridging the gap between established finance and emerging blockchain technologies.