Goldman Sachs and BNY Mellon have launched a blockchain-based system for tracking money market funds ownership in the United States, involving major asset managers, to increase transparency and efficiency.
This initiative marks a significant step in blockchain adoption, offering potential enhancements in institutional liquidity management without altering immediate market conditions on public crypto assets.
Goldman Sachs and BNY Mellon Blockchain Partnership
Goldman Sachs and BNY Mellon have partnered to launch a blockchain-based system for recording money market fund ownership. This collaboration utilizes Goldman’s GS DAP platform, pioneering transparency and efficiency in asset management. Major investment managers like BlackRock, Fidelity, and Federated Hermes are participating. This marks a major milestone as it’s the first in the U.S. to enable MMF share subscriptions and recording using blockchain technology.
“This partnership with BNY Mellon and asset managers is a leap forward for institutional blockchain adoption, bringing real-world assets onto a secure digital platform.” — David Solomon, CEO, Goldman Sachs
Closed System Raises Liquidity and Transfer Efficiency
The tokenization of MMFs is expected to enhance institutional liquidity and ease of transfer, although it currently operates on a closed system. Public reactions are primarily from institutional circles, with developers focusing on interoperability with DeFi protocols. The event is anticipated to influence future financial systems, with historical trends showing increased institutional blockchain adoption. While direct impact on major cryptocurrencies remains limited, growth is expected if MMFs extend to public chains.
Real-World Asset Tokenization Precedents Noted
The collaboration resembles past efforts by BlackRock and Franklin Templeton in real-world asset tokenization. These instances showed increased experimentation yet limited public impact, offering a valuable precedent for future developments. Analysts predict this move may set the groundwork for wider blockchain utilization in asset management, despite limited current impact. The eventual public chain transition could create substantial opportunities for blockchain platforms.
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