The bank's BLIQUID tokens give institutional clients a familiar risk profile on a blockchain. The move follows similar tokenized funds from BlackRock and Franklin Templeton.
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BNY Mellon, the world's largest custodian bank, has launched a tokenized money market fund in partnership with BitGo. The product, called BLIQUID, targets eligible institutional clients in the US and UK, with plans to expand.
The tokens represent shares in a money market fund managed by BNY Investments Dreyfus, the bank's established fund arm. Instead of holding traditional fund shares on legacy systems, clients can now hold tokenized versions on a blockchain. BNY Mellon built the platform on its global digital transfer agency infrastructure, which handles issuance and tracking. The bank services roughly $8.6 trillion in assets and more than 7.6 million investor accounts.
BitGo's role in the initiative was not detailed. The bank did not disclose specific technical or operational contributions from the digital asset custodian.
BNY Mellon has been building crypto infrastructure for years. Its digital asset custody platform launched in October 2022, initially supporting bitcoin and ether transfers for select clients. In October 2023, the bank expanded its digital transfer agency capabilities, laying the groundwork for a product like BLIQUID. BNY Mellon was the first major US bank to provide regulated custody for digital assets.
Competitors are already active in tokenized money market funds. BlackRock offers a share class called BSTBL. Baillie Gifford launched a tokenized fund called BAGEY. Franklin Templeton has run a tokenized money market fund on public blockchains for several years.
For institutional investors, BLIQUID provides another on-ramp to tokenized products from a regulated bank. The money market fund structure offers a familiar risk profile, unlike more exotic decentralized finance products.
Expansion beyond the US and UK will depend on regulatory developments in other markets, the bank said.
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