JPMorgan Wants to Be the Reserve Bank for Stablecoin Issuers With New Ethereum Fund

TLDR

• JPMorgan filed with the SEC to launch a second tokenized money market fund on Ethereum, called JLTXX
• The fund will invest in U.S. Treasuries and overnight repurchase agreements
• It is designed to meet reserve requirements for stablecoin issuers under the GENIUS Act
• BlackRock filed for a similar product just days earlier
• The tokenized real-world asset market has grown to $32.2 billion, with Treasury products making up $15.9 billion

JPMorgan has filed with the U.S. Securities and Exchange Commission to launch a new tokenized money market fund on the Ethereum blockchain, its second such product after the MONY fund it launched late last year.

The new fund is called the OnChain Liquidity-Token Money Market Fund and will trade under the ticker JLTXX. It will invest in short-term U.S. Treasuries, cash, and overnight repurchase agreements backed by government securities.

The SEC filing became effective May 13. JPMorgan has not announced a specific launch date.

The fund’s blockchain infrastructure will be run by Kinexys Digital Assets, JPMorgan’s in-house blockchain unit, formerly known as Onyx. Ethereum is currently the only blockchain available to investors, though the bank said it expects to expand to other networks in the future.

Designed for Stablecoin Issuers

The fund is specifically structured to meet reserve requirements set out in the GENIUS Act, U.S. legislation that governs stablecoin issuers. Under that law, stablecoin companies must hold highly liquid assets such as U.S. Treasuries, cash, and insured bank deposits as reserves.

JPMorgan said in its filing that the fund is designed to “satisfy the requirements for eligible reserve assets that stablecoin issuers are required to maintain” under the act. This could make JLTXX a useful tool for stablecoin firms looking for a compliant, yield-bearing reserve option.

JLTXX differs from the earlier MONY fund, which was aimed at institutional investors managing cash on-chain. The new fund has a narrower focus on the stablecoin reserve market.

JPMorgan is not alone in this space. Morgan Stanley launched a similar stablecoin reserve-focused money market fund last month, though that product does not run on blockchain rails. Franklin Templeton also has a tokenized fund called BENJI.

Wall Street Moves Into Tokenized Assets

BlackRock, the world’s largest asset manager, filed paperwork just days before JPMorgan for a tokenized Treasury reserve vehicle. It also filed for blockchain-based shares of an existing $7 billion money market fund.

The tokenized real-world asset market has grown more than 200% over the past year. As of May 12, it stood at roughly $32.2 billion, according to data from RWA.xyz. Tokenized U.S. Treasury products make up the largest share at around $15.9 billion.

Tokenization creates blockchain-based versions of traditional financial assets. Supporters say it can speed up settlement, improve transparency, and allow assets to be traded or used as collateral around the clock.

JPMorgan has been one of the most active traditional banks in this area, having also processed tokenized collateral and settlement transactions for institutional clients through Kinexys.

The JLTXX filing adds to a growing list of Wall Street firms building blockchain-based products for both institutional clients and the emerging stablecoin industry.

The post JPMorgan Wants to Be the Reserve Bank for Stablecoin Issuers With New Ethereum Fund appeared first on CoinCentral.