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Goldman Sachs and BNY Mellon to tokenize funds, leading innovation in digital assets.
Major financial firms Goldman Sachs and BNY Mellon announced on the 23rd that they will jointly launch an initiative to tokenize money market funds (MMF) using blockchain technology.
BNY Mellon has adopted the blockchain technology developed by Goldman Sachs to manage ownership of certain MMFs on-chain. Both companies explained that this initiative is an important step towards enhancing the practicality and transferability of existing MMFs, responding to the evolving demands of institutional investors.
What is a Money Market Fund?
A type of investment trust that gathers funds from investors and manages them. It is characterized by conducting operations with high safety, such as investing in government bonds.
This initiative is described as being joined by BlackRock and Fidelity Investments at the start, which has garnered a lot of attention. In the management of MMF, solutions such as BNY Mellon's "LiquidityDirect platform" and "Goldman Sachs Digital Asset Platform (GS DAP)" will be used in a comprehensive manner.
MMF is tokenized with GS DAP, allowing investors to purchase and redeem MMF through the LiquidityDirect platform.
BNY Mellon explains that it aims to create global business opportunities in the future by continuing tokenization through GS DAP.
Leading the digital asset space
In this announcement, Laide Majiyagbe, the Global Head of Liquidity, Funding, and Collateral at BNY Mellon, commented as follows.
As the digitization of the financial system progresses and shifts towards real-time responses, BNY Mellon is working on the realization of secure and scalable solutions that shape the future of finance.
The tokenization of MMF is the first step towards this transition. We are proud to be at the forefront of this kind of initiative for the first time, as we are this time.
In addition, the comments from Mathew McDermott, the Global Head of the Digital Assets Division at Goldman Sachs, are as follows.
By using tokens that represent the value of MMF through GS DAP, we can unlock the utility of collateral. In the future, we would like to explore more seamless transferability.
We are looking forward to strategic collaboration with BNY Mellon towards the long-term vision of GS DAP, and we will continue to lead and innovate in the digital asset space.