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The news: JPMorgan is launching its first tokenised money-market fund on the Ethereum blockchain, seeding the fund with USD100 million ($150.43 million) of its own capital before opening it to outside investors on Tuesday, the Wall Street Journal reports.
The numbers: JPMorgan’s ‘My OnChain Net Yield Fund’, or “MONY” will be supported by the bank’s tokenisation platform, Kinexys Digital Assets, the masthead reports. MONY will be open to qualified investors, or individuals with at least USD5 million in investments and institutions with a minimum of USD25 million. The fund has a USD1 million investment minimum.
The context: Investors will be able to subscribe to the MONY fund through JPMorgan’s Morgan Money portal, in exchange, they will receive digital tokens in their crypto wallets.
The Genius Act has seen Wall Street institutions experiment with tokenisation since it was passed in June this year, providing a regulatory framework for the use of tokenised money – otherwise known as stablecoins.
The WSJ writes that tokenised money-market funds are increasingly attractive for crypto investors as they allow holders to earn a yield while their assets remain entirely on the blockchain. This solves a previous dilemma where investors typically held large amounts of idled cash in stablecoins, which traditionally don’t pass on interest income to holders. For fund managers, tokenisation can cut costs and reduce transaction settlement times.
What they said: “There is a massive amount of interest from clients around tokenization,” John Donohue, head of global liquidity at JPMorgan Asset Management told the WSJ. “And we expect to be a leader in this space and work with clients to make sure that we have a product lineup that allows them to have the choices that we have in traditional money-market funds on blockchain.”