$6 Trillion Money Markets to Run 24/7 on Goldman Blockchain

@Techa, this matter is related to blockchain technologies and the tokenization of the financial system, so I’m assigning it to you.

Key Event: Goldman Sachs and BNY Mellon have partnered to leverage blockchain technology to tokenize the $7 trillion money market fund sector. This platform allows institutional investors to buy tokenized funds with ownership recorded directly on Goldman’s blockchain, providing faster settlements, real-time trading, and 24/7 access. Major players like BlackRock, Fidelity, and Federated Hermes are already involved, signaling significant transformation in the traditional financial system.

It seems you're interested in the recent collaboration between Goldman Sachs and BNY Mellon to tokenize money market funds. This is indeed a significant development in the financial technology space. Here's a breakdown of what's happening.

A Partnership for Digital Assets

Goldman Sachs and BNY Mellon have teamed up to create a system that allows institutional investors to buy and sell tokenized money market funds. In this arrangement, BNY Mellon, the world's largest custodian bank, will use Goldman Sachs' blockchain technology to keep a record of their clients' ownership in certain money market funds. The ownership of these funds will be recorded on Goldman Sachs' private blockchain, called GS DAP®.

This initiative is the first of its kind in the United States where fund managers have enabled subscriptions for shares of their money market funds through BNY's LiquidityDirect℠ and Digital Asset platforms, with the value represented by "mirrored record tokenization" on GS DAP®. Essentially, BNY will create digital tokens that mirror the shares of money market funds.

A number of prominent financial institutions are participating in the initial launch, including BlackRock, Fidelity Investments, and Federated Hermes, along with the asset management divisions of both Goldman Sachs and BNY Mellon.

The "How" and "Why" of Tokenization

So, what does it mean to "tokenize" a money market fund? Think of it as creating a digital representation of a real-world asset on a blockchain. These tokens can then be traded more easily and efficiently.

Here's how this new system brings changes to the traditional model:

• 24/7 Trading: Unlike traditional markets that have set hours, this platform will allow for around-the-clock trading.
• Faster Settlement: Blockchain technology enables near-instantaneous settlement of transactions, a significant improvement over the one or two days it can take in the traditional system.
• Increased Efficiency: The use of smart contracts, which are essentially self-executing contracts with the terms of the agreement directly written into code, can automate many of the administrative tasks involved in these transactions. This reduces the need for intermediaries, which in turn can lead to faster and cheaper transactions.
• Enhanced Liquidity: By making these assets easier to trade, tokenization can increase their liquidity.
• Improved Collateral Management: Tokenized money market funds can be used as collateral more efficiently. Instead of the time-consuming process of selling a fund to post collateral, an investor can simply transfer the token.

While this new technology is being implemented, BNY will continue to maintain traditional records of the funds to ensure a smooth transition for investors.

The Broader Implications

This partnership is a strong indication that traditional financial institutions are increasingly embracing blockchain technology not just for cryptocurrencies, but as a foundational infrastructure for the future of finance. The move is also timely, following the recent signing of the GENIUS Act, which has provided a regulatory framework for stablecoins in the U.S.

Tokenized money market funds, which offer a yield, are seen as an attractive option for institutional investors like hedge funds and corporate treasurers who are looking for a safe place to invest large amounts of cash.

This collaboration between Goldman Sachs and BNY Mellon could pave the way for a more digitized and efficient financial ecosystem, where a wider range of assets, from bonds to real estate, could be tokenized in the future.

Techa, focus your article on clearly explaining the key development: Goldman Sachs and BNY Mellon’s collaboration to tokenize money market funds. Start by outlining what happened—the creation of a blockchain-based system to digitize these assets for institutional investors, emphasizing the role of GS DAP® and mirrored record tokenization. Keep the technical jargon minimal and prioritize a clear breakdown of how tokenization works (e.g., digital representation, faster settlements, enhanced liquidity). Highlight the real-world benefits like 24/7 trading and improved collateral management, then briefly address the broader implications for financial institutions and the digitization of traditional assets. Avoid redundancy or overly detailed background; keep it streamlined and informative.

$7T Money Markets to Run 24/7 on Goldman Blockchain

• Blockchain-powered platform revolutionizes trading in the money market fund sector.
• Tokenized shares promise instant settlements and streamlined collateral processes.

On July 23, 2025, Reuters reported that Goldman Sachs and BNY Mellon, two of the world’s top financial institutions, unveiled a blockchain-powered platform to tokenize the $7 trillion money market funds sector. This initiative enables institutional investors to purchase tokenized shares, with ownership securely recorded on Goldman Sachs’ GS DAP® platform.

BNY Mellon, the world’s largest custodian bank, is utilizing Goldman Sachs’ blockchain technology to digitize shares of money market funds, ensuring they reflect the value of traditional shares. The platform provides benefits such as around-the-clock trading, instant settlements, and operational efficiencies through synchronized digital token and traditional record systems.

Major industry players, including BlackRock, Fidelity Investments, Federated Hermes, and Goldman Sachs Asset Management, are actively participating in the launch. BNY Mellon will process tokenized share subscriptions using its LiquidityDirect℠ and Digital Asset platforms, while GS DAP® highlights tokenization as a transformative bridge between traditional finance and blockchain technology.

Tokenization transforms real-world assets into digital blockchain representations, facilitating efficient trading, transparency, and automation. Smart contracts reduce intermediary reliance, cutting trading costs and boosting liquidity. Additionally, tokenized assets revolutionize collateral management—investors can now transfer tokens instead of selling traditional funds to meet collateral requirements.

This move underscores the accelerating adoption of blockchain technology outside the cryptocurrency sphere. Traditional financial institutions are leveraging blockchain’s potential to update legacy systems, spurred in part by regulatory support like the GENIUS Act’s stablecoin framework. With money market funds offering dependable yields, the new platform presents an attractive blockchain-based solution for institutional investors seeking both efficiency and accessibility.

As of July 23, 2025, 12:00 UTC, Ethereum (ETH) is trading at $1,975, recording a 1.8% increase in 24-hour trading volume, according to CoinMarketCap.