JPMorgan files for tokenized money market fund on Ethereum

JPMorgan Chase has once again filed to launch a tokenized money market fund on the Ethereum blockchain with the SEC. This fund would be JPMorgan’s second such product, designed to be a reserve asset for stablecoin issuers pending approval from the SEC.

The money market fund is called the JPMorgan OnChain Liquidity-Token Money Market Fund and it will trade under the ticker JLTXX.

The fund will invest in U.S. Treasury securities and repurchase agreements backed by either treasuries or cash, according to the SEC filing. The exact timeline for full operation and acceptance of investors was not specified in the filing.

JPMorgan also stated that the fund’s blockchain infrastructure will be operated by Kinexys Digital Assets, its in-house digital assets unit.

Ethereum is “currently the only available blockchain for use by investors, although expansion to other blockchains is anticipated in the future,” the statement mentioned.

Built for stablecoin backing

The tokenized MMF has been well structured to meet requirements in the Guiding and Establishing National Innovation for U.S. Stablecoins Act, also known as the GENIUS Act.

This act requires stablecoin issuers within the U.S. jurisdiction to back their tokens with highly liquid assets, including cash, treasuries, and insured bank deposits.

“The Fund invests in a manner intended to satisfy the requirements for eligible reserve assets that stablecoin issuers are required to maintain,” the filing stated.

This makes the JLTXX fund come off as more of a compliance tool for stablecoin issuers in the U.S. rather than a general-purpose investment fund for the public.

Morgan Stanley had filed for a similar stablecoin-backed money market fund last month, although Morgan Stanley’s proposed fund does not employ blockchain.

JPMorgan furthers tokenization plans

The JLTXX fund is JPMorgan’s second tokenized fund on Ethereum. The bank launched its MONY fund late last year, targeting institutional investors looking for cash management on-chain, according to previous Cryptopolitan reporting.

This newly filed tokenized fund, however, appears aimed at stablecoin issuers who need liquidity reserves, instead.

Franklin Templeton also offers a tokenized money market fund product, known as BENJI, with the RWA space becoming increasingly competitive among traditional financial institutions over the past year.

The tokenized real-world asset market has reached a value of about $32.2 billion as of May 12, with U.S. Treasury products accounting for the largest share of the market at approximately $15.9 billion, according to data from RWA.xyz.

Fund fees and structure

The filing mentions total annual operating expenses of 0.71% for the Token Class shares before fee waivers.

JPMorgan and its affiliates have agreed to cap net expenses at 0.16% through June 30, 2028, absorbing the difference. On a $10,000 investment, that works out to $16 in the first year and $113 over three years, assuming the waiver applies for its contractual term.

The fund is registered under the Investment Company Act of 1940 and the Securities Act of 1933.

It carries standard money market risks, including interest rate, credit, and what the filing calls “blockchain technology risk” and “stablecoin issuer shareholder transactions risk,” categories that reflect the product’s novel structure.

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