Tokenisation is moving from theory to practice in the liquidity space. In particular, entities are taking steps to integrate blockchain technology with MMFs, offering a sense of how familiar instruments might operate in a more digital environment. For most treasurers, the interest lies less in novelty than in potential practicality: faster settlement, clearer visibility, and the ability to access funds beyond traditional cut-off times.
It is still early days for the market. But a number of institutions are exploring how fund shares might be issued, recorded and transferred using distributed ledger infrastructure. Recent initiatives have focused on representing money market fund holdings and even bank deposits on-chain, with mirrored records maintained alongside traditional books and records. As seen in BNY’s white paper, “The Digital Revolution: Transforming Financial Market Infrastructure,” the analysis suggests that stablecoins, tokenised deposits, and digital MMFs could reach ~$3.6t by 2030. The aim is not to replace existing instruments, but to extend their capabilities, combining the familiar characteristics of MMFs with the flexibility and transferability of digital assets.
“Tokenised MMFs could unlock a new set of capabilities and interoperability for treasurers,” says Jacob. “In an end state where there is real-time asset movement and transferability, clients will have the opportunity to move funds globally at any time while also leveraging the asset class for yield.”
Potential use cases extend beyond simple investment. Tokenised funds could be mobilised as collateral, integrated into automated workflows, or exchanged as part of value transactions. In plain terms, it could mean fewer manual steps and faster transfers.
None of this happens in a vacuum. Regulatory frameworks are evolving quickly, particularly in areas linked to digital assets and programmable money. In the US, the GENIUS Act has established a federal framework for stablecoins, with potential implications for their use in institutional finance. Developments such as this are prompting treasury teams to monitor not just new asset classes but also the broader infrastructure and compliance environment surrounding them.
At the same time, tokenised MMFs are attracting attention as yield-generating instruments that sit within a familiar regulatory perimeter while offering greater mobility and efficiency. For treasurers, the task is to understand how these developments intersect and what they might mean for future liquidity strategies.
“The tools that treasurers use today may not be the ones they use tomorrow,” Jacob says. “Staying agile and reassessing strategies across regulatory, cyber and data considerations will be essential as the industry continues to evolve.“
New technologies will need to integrate with existing systems without introducing additional vulnerabilities or operational risk. Governance, oversight and partner selection, therefore, become central to any modernisation effort.
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