The Bank of New York Mellon (BNY) is set to utilize blockchain technology developed by Goldman Sachs to accurately record customer ownership of selected Money Market Funds (MMFs). This initiative enhances the transferability of existing MMF shares, marking a significant development in the industry.
This will be the first instance in the United States where fund managers allow subscriptions for MMF shares through BNY’s LiquidityDirect and Digital Asset platforms. The corresponding asset values will be represented through mirrored record tokenization using Goldman Sachs’ Digital Asset Platform (GS DAP).
Notable participants in the launch include BlackRock, BNY Investments Dreyfus, Federated Hermes, Fidelity Investments, and Goldman Sachs Asset Management.
BNY will retain responsibility for maintaining the official books, records, and settlements for these funds, adhering to existing regulations while implementing mirror tokens on GS DAP. This approach aims to create new market opportunities on a global scale.
Mathew McDermott, global head of digital assets at Goldman Sachs, commented, “Utilizing tokens that represent the value of shares of Money Market Funds on GS DAP allows us to enhance their utility as collateral and facilitates smoother transferability in the future. We are thrilled about this strategic partnership with BNY as we advance our long-term vision for GS DAP, continuing to lead and innovate within the digital assets sector.”