Tokenized money market funds

Tokenizing a money market fund changes how a share is recorded and transferred, not what the fund invests in. The Finance Loop hub answer on tokenized funds covers the general mechanics: a transfer agent or the fund's own smart contract keeps the register of holders on a ledger, and the fund's net asset value still comes from the same pricing process a conventional money market fund uses. A share of a tokenized US Treasury money market fund is a fund share under securities law, not a crypto asset in the MiCA sense.

BlackRock launched the BlackRock USD Institutional Digital Liquidity Fund, known as BUIDL, with Securitize as the tokenization platform and transfer agent. The fund holds short-duration US Treasury bills and repo, targets a stable one-dollar share value, and accrues yield to holders daily. BUIDL is the largest fund of its kind by assets, and its tokens exist on several public blockchains through Securitize's technology, which lets institutional holders move shares and use them as collateral outside fund business hours.

Franklin Templeton issues BENJI, the onchain share token of the Franklin OnChain US Government Money Fund, a mutual fund registered under the US Investment Company Act. BENJI runs on nine public blockchains, including Stellar, Polygon, Arbitrum, Avalanche, Aptos, Ethereum, Base, Solana and BNB Smart Chain, and carries a management fee of 0.15 percent, low for the category. Because it is a registered mutual fund and not a private placement, BENJI reaches a broader range of investors than a fund such as BUIDL, which is limited to qualified purchasers.

Fidelity, Invesco and Ondo Finance run their own tokenized money market or treasury products alongside BUIDL and BENJI, most invested in short-term US government debt with daily or near-daily liquidity. The use case banks and trading firms name most often is collateral: a tokenized fund share can secure a trade or a loan around the clock, where a conventional money market fund can only be redeemed and moved during fund business hours. DTCC named tokenized money market fund shares among the products it tested when it moved US Treasury and equity settlement onto its tokenization service in 2026, alongside BlackRock, Goldman Sachs, J.P. Morgan and Vanguard as participants (DTCC, 2026). In Europe, the fund association EFAMA asks regulators in its tokenization guide for asset managers to clarify that tokenized money market funds can be posted as collateral for derivatives margin and in repo trades. Christoph Hock, Head of Tokenisation and Digital Assets at Union Investment, calls tokenized money market funds a potentially important use case once markets move to 24/7 trading and instant settlement, in an episode of the Inside Digital Assets podcast by SeturionX (in German).

A tokenized money market fund share is not free of risk just because it moves fast. The fund still depends on its manager pricing the underlying Treasury bills correctly and on the blockchain infrastructure working as intended; a holder who wants to redeem for cash still goes through the fund's stated redemption process, which for most tokenized funds still runs on business days even though the token itself trades around the clock. Securitize, the platform behind BUIDL, and the transfer agents behind BENJI both keep the legal register of who owns what, so a lost private key does not mean a lost claim on the fund the way losing a crypto wallet can mean a lost coin.

Finance Loop is the meeting place for asset managers and fund administrators who follow tokenized fund products such as BUIDL and BENJI into custody, settlement and collateral use. The topic sits inside tokenization in Germany, where DekaBank, DZ BANK and Union Investment already bought a tokenized bond issued under the eWpG and where fund administrators watch the same ledger infrastructure for money market products. At Capital & Code in Frankfurt, where Finance Loop is a media partner, Franklin Templeton, KfW and Union Investment discuss tokenized money market funds, treasury and settlement on a panel chaired by the German savings banks association DSGV.

A tokenized money market fund is a fund invested in short-term, low-risk instruments such as Treasury bills, with its shares recorded and transferred as tokens on a blockchain. BlackRock's BUIDL and Franklin Templeton's BENJI are the two largest examples.

Yes, that is the main reason trading firms hold one. A tokenized fund share can move to a counterparty or a smart contract as collateral without waiting for the fund's normal redemption cycle, which is why banks such as those testing DTCC's tokenization service include money market fund shares in their pilots.

Several issuers offer Luxembourg-domiciled or European feeder structures of their tokenized money market products alongside the US funds, and European banks including DekaBank and DZ BANK run their own tokenized bond and fund pilots under the German eWpG. The regulatory path for a fund sold to EU investors runs through the fund's home-country regulator, not through MiCA.