JPMorgan Plans Second Tokenized Money Market Fund on Ethereum

TLDR

• JPMorgan filed to launch JLTXX, its second tokenized money market fund on Ethereum.
• JLTXX will invest in U.S. Treasurys and overnight repos backed by Treasurys or cash.
• JPMorgan says the fund is designed to meet GENIUS Act stablecoin reserve rules.
• Kinexys Digital Assets will manage the blockchain infrastructure for the fund.
• Tokenized real-world assets reached about $32.2B, with Treasurys at $15.9B.

JPMorgan is preparing to launch a second tokenized money market fund on Ethereum as large financial institutions continue expanding blockchain-based products for cash management, Treasury exposure and stablecoin reserve needs.

The new product, named the JPMorgan OnChain Liquidity-Token Money Market Fund, will trade under the ticker JLTXX, according to a filing with the U.S. Securities and Exchange Commission. The fund will invest in U.S. Treasurys and overnight repurchase agreements backed by Treasurys or cash.

JPMorgan said the fund is designed to meet eligible reserve asset requirements for stablecoin issuers under the GENIUS Act, the U.S. stablecoin law that requires compliant issuers to hold highly liquid assets such as cash, insured bank deposits and short-term government securities.

The filing is set to become effective on May 13, though JPMorgan did not disclose a launch date. The fund will use Ethereum as its initial blockchain network, with possible expansion to other blockchains later.

JLTXX Targets Stablecoin Reserve Needs

JPMorgan said the fund will invest in a way intended to satisfy reserve requirements for stablecoin issuers. That positioning could make JLTXX relevant for companies issuing dollar-backed stablecoins under U.S. rules.

Stablecoin issuers are expected to maintain reserves that can support redemptions and protect users during periods of market stress. Short-term Treasurys and repo agreements backed by government securities are commonly used for that purpose because they are liquid and widely accepted in traditional finance.

JLTXX will maintain blockchain-based token balances linked to investor ownership records. Approved users will be able to submit purchase, redemption and transfer requests through Ethereum, according to the filing.

The blockchain infrastructure for the product will be managed by Kinexys Digital Assets, JPMorgan’s blockchain unit. Kinexys was previously known as Onyx and has supported the bank’s work in tokenized collateral, settlement and institutional blockchain transactions.

Ethereum Used as Initial Blockchain

JPMorgan said Ethereum is currently the only blockchain available for investors in the new fund. The filing also states that expansion to other blockchains is anticipated in the future.

The choice of Ethereum places JLTXX on the largest smart contract network by tokenized asset activity. Ethereum already hosts several tokenized Treasury and money market products, as well as large stablecoin transaction volumes.

Tokenized fund shares allow ownership records and certain transfer functions to operate through blockchain infrastructure. Supporters of tokenization say this can support faster settlement, improved recordkeeping and wider use of fund shares as digital collateral.

JPMorgan launched its first tokenized money market fund on Ethereum, MONY, late last year. That product focused mainly on institutional investors seeking on-chain cash management tools.

JLTXX expands that strategy by targeting stablecoin reserve management more directly. The new fund also follows similar moves from other large asset managers and banks building blockchain-linked Treasury products.

Wall Street Tokenization Race Expands

JPMorgan’s filing comes days after BlackRock filed paperwork for new tokenized Treasury and money market products. Franklin Templeton also operates BENJI, one of the better-known tokenized money market fund products.

Morgan Stanley launched a stablecoin reserve-focused money market fund last month, though that product does not operate on blockchain rails. The activity shows that traditional financial firms are competing to serve stablecoin issuers, crypto companies and institutions seeking tokenized cash equivalents.

Tokenized real-world assets have grown quickly over the past year. Data from RWA.xyz showed the market at about $32.2 billion as of May 12, with tokenized U.S. Treasury products making up the largest category at around $15.9 billion.

The growth reflects demand for on-chain access to low-risk yield products, especially among institutions that use stablecoins, tokenized collateral and digital settlement systems.

JPMorgan has been one of the most active major banks in blockchain-based finance. Through Kinexys, the bank has processed tokenized collateral and settlement transactions for institutional clients.

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