Blockchain-based Market Funds Introduced by Goldman Sachs and BNY Mellon
In a significant stride towards integrating traditional finance with digital ledger technology, Goldman Sachs Group, Inc. and The Bank of New York Mellon (BNY) have collaborated to introduce tokenized Money Market Funds (MMFs) using blockchain technology[1][4][5]. This groundbreaking initiative follows the passage of the GENIUS Act on 18 July 2025[1].
The partnership employs Goldman Sachs' blockchain platform, GS DAP, to maintain an on-chain ownership record of these tokenized MMFs, enhancing transparency and offering real-time settlement features[1][3][4]. This development allows institutional investors to transact tokenized MMFs directly on the blockchain, streamlining processes and potentially reducing operational risks.
One of the key advantages of tokenization is the ability to issue small, fractional shares, which could significantly speed up settlement[2]. Furthermore, the funds permit 24/7 trading and real-time settlement, making them attractive to investors seeking liquidity and efficiency[6].
Ownership of each fund will be recorded on Goldman Sachs' private blockchain system, ensuring a transparent, immutable, and auditable record of holdings[1]. Clients of BNY Mellon will invest and redeem MMF shares via its market-leading LiquidityDirectSM technology, which connects to GS DAP® through integration with BNY's Digital Assets platform[7].
The launch has garnered support from notable players in the industry, including BlackRock, Fidelity Investments, Federated Hermes, Goldman Sachs Asset Management, and BNY Mellon's asset management arm[8]. This collaboration aligns with a broader industry trend where major asset managers are exploring tokenization of investment funds to leverage blockchain's benefits[1].
Goldman Sachs is considering offering tokenized projects for US funds, marking a potential expansion of this initiative[9]. The funds are typically backed by US Treasuries or similar low-risk instruments, offering a compliant route to yield with minimal volatility[10].
The demand for tokenized products is increasing among traditional asset managers, brokerages, and insurers, reflecting growing interest in bringing traditional finance onto digital ledgers[11]. A McKinsey report cited estimates that the tokenization market could expand to around $2 trillion by 2030[1]. This move by Goldman Sachs and BNY Mellon is part of a race among financial institutions to integrate capital markets infrastructure with blockchain technology.
Sources: [1] https://www.goldmansachs.com/corporate/press-center/press-releases/press-release-archive/2025/goldman-sachs-and-the-bank-of-new-york-mellon-announce-tokenized-money-market-funds-solution.html [2] https://www.coindesk.com/business/2025/07/27/goldman-sachs-and-bny-mellon-launch-tokenized-money-market-funds-on-blockchain/ [3] https://www.reuters.com/business/finance/goldman-sachs-bny-mellon-team-up-offer-tokenized-money-market-funds-2025-07-27/ [4] https://www.wsj.com/articles/goldman-sachs-bny-mellon-join-forces-on-tokenized-money-market-funds-11627542143 [5] https://www.ft.com/content/d1c81c88-b56d-47d0-b730-f84e6e5407e6 [6] https://www.cointelegraph.com/news/goldman-sachs-and-bny-mellon-launch-tokenized-money-market-funds-on-blockchain [7] https://www.coindesk.com/business/2025/07/27/goldman-sachs-and-bny-mellon-launch-tokenized-money-market-funds-on-blockchain/ [8] https://www.coindesk.com/business/2025/07/27/goldman-sachs-and-bny-mellon-launch-tokenized-money-market-funds-on-blockchain/ [9] https://www.coindesk.com/business/2025/07/27/goldman-sachs-and-bny-mellon-launch-tokenized-money-market-funds-on-blockchain/ [10] https://www.reuters.com/business/finance/goldman-sachs-bny-mellon-team-up-offer-tokenized-money-market-funds-2025-07-27/ [11] https://www.ft.com/content/d1c81c88-b56d-47d0-b730-f84e6e5407e6
Stablecoins, backed by low-risk instruments like US Treasuries, are expected to be used in the tokenized Money Market Funds introduced by Goldman Sachs and The Bank of New York Mellon, offering a compliant route to yield with minimal volatility. The partnership employs Goldman Sachs' blockchain platform, GS DAP, to maintain an on-chain ownership record of these funds, potentially streamlining processes and reducing operational risks for institutional investors.
