JPMorgan to Launch Tokenized Money Market Fund

Banking giant JPMorgan has filed to launch a new tokenized money market fund on Ethereum. The fund allows stablecoin issuers to hold reserves in a regulated vehicle while earning interest.

The filing comes after Morgan Stanley announced its own money market fund called the Stablecoin Reserves Portfolio.

JPMorgan Files to Launch Tokenized Money Market Fund

The fund, called the OnChain Liquidity-Token Money Market Fund, will trade under the ticker JLTXX. According to a regulatory filing with the Securities and Exchange Commission, it will invest in US Treasury bills and overnight repurchase agreements collateralized by cash or US Treasurys. The fund will also comply with the GENIUS Act, signed in July, and be managed by JPMorgan’s Kinexys Digital Assets (KDA) unit. The filing adds that the fund utilizes a “permissioned system” sitting on top of blockchains. The fund is currently available only on Ethereum, but will be expanded to other networks in the future. The filing states, “The Ethereum blockchain, a public blockchain network, is currently the only available blockchain for use by investors, although expansion to other blockchains is anticipated in the future.”

Fund Details

Investors in the fund must commit a minimum investment of $1 million. The fund has a 0.16% annual fee after waivers. JPMorgan stated that the filing becomes effective on Wednesday, but has not disclosed the fund’s launch date. The fund also highlighted blockchain technology risk alongside interest rate changes and general market risks, noting that blockchain technology is relatively new and untested. The risks include the blockchain not functioning as intended, regulatory concerns, and unknown technical flaws.

Blockchain-based tokenization has attracted strong interest from Wall Street, with executives believing the technology offers greater efficiency in settlements and trading than traditional systems. According to RWA.xyz data, over $32 billion worth of real-world assets, including stocks, bonds, commodities, and real estate, are currently tokenized on-chain.

The fund is JPMorgan’s second crypto-linked initiative in a week following Ondo Finance’s collaboration with the bank’s Kinexys platform, Ripple, and Mastercard to settle tokenized treasuries on the XRP ledger. The upcoming tokenized money market fund will directly compete with BENJI, a tokenized money market fund from rival Franklin Templeton. BENJI is available on BNB Chain, Avalanche, and Canton.

JPMorgan’s Foray Into Tokenization

JLTXX is JPMorgan’s second tokenized product after the My OnChain Net Yield Fund (MONY). MONY launched in December on Ethereum and holds short-term debt securities with higher returns than bank deposits. JPMorgan also participated in a pilot transaction last week, moving the first tokenized US Treasury fund from the US to its Singapore bank account via the XRP ledger and interbank rails.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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