The Bank of New York Mellon Corporation and Goldman Sachs have announced a collaborative initiative in which BNY is expected to use blockchain technology developed by Goldman Sachs to maintain a record of customer ownership in select money market funds (MMFs). This is intended to improve the utility and transferability of existing MMF shares.
This combined approach marks the first time in the US that fund managers are expected to allow subscriptions for shares of their MMFs via BNY’s LiquidityDirect and Digital Asset platforms, with the corresponding value represented through mirrored record tokenisation using GS DAP.
BlackRock, BNY Investments Dreyfus, Federated Hermes, Fidelity Investments, and Goldman Sachs Asset Management are expected to participate in the initial launch.
Investors ought to be able to subscribe to and redeem MMF shares through BNY’s LiquidityDirect platform, which connects with GS DAP via integration with BNY’s Digital Assets platform. Mirror tokens of MMF shares are created via GS DAP, a technology platform developed by Goldman Sachs Digital Assets in collaboration with distributed ledger specialist, Digital Asset.
“As the financial system transitions toward a more digital, real-time architecture, BNY is committed to enabling scalable and secure solutions that shape the future of finance,” said Laide Majiyagbe, global head of liquidity, financing and collateral at BNY. “Mirrored tokenisation of MMF shares is a first step in this transition, and we are proud to be at the forefront of this first-of-its-kind initiative. Our collaboration with Goldman Sachs Digital Assets highlights our role as a trusted bridge between traditional finance and emerging technologies – empowering clients to navigate this transformation with confidence.”
BNY is expected to continue maintaining the official books, records, and settlements for the funds under current guidelines while enabling mirror tokens on GS DAP, with a view to exploring future opportunities in other markets.
“Using tokens representing the value of shares of money market funds on GS DAP would enable us to unlock their utility as a form of collateral and open up more seamless transferability in the future,” said Mathew McDermott, global head of digital assets at Goldman Sachs. “We are excited about this strategic collaboration with BNY in our journey towards the longer-term vision for GS DAP and as we continue to lead and innovate in the digital assets space.”
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