JPMorgan has filed to launch a tokenized money market fund on Ethereum, allowing stablecoin issuers to hold the reserves backing their stablecoins in a regulated cash-like vehicle while earning interest.
“OnChain Liquidity-Token Money Market Fund”, symbol JLTXX, will invest in US Treasury bills and overnight repos secured by US Treasuries or cash, agreementfiled Tuesday with the U.S. Securities and Exchange Commission. JLTXX seeks to comply with the GENIUS Act, a stablecoin-focused law signed in July.
Investors are subject to a minimum investment of $1 million and the fund carries an annual fee of 0.16% after the waiver. The fund will be managed by JPMorgan’s blockchain unit, Kinexys Digital Assets. The investment bank said the requirement takes effect on Wednesday, although it did not disclose when it would launch the fund.
Blockchain-based tokenization has drawn increasing interest from Wall Street executives in recent months, many of whom see the technology as offering greater operational efficiency for trading and settlement than traditional systems.
More than $32.2 billion worth of real-world assets, excluding stablecoins, are currently tokenized on the chain, according to RWA.xyz data. Almost all major asset classes have been tokenized, including commodities, stocks, bonds and real estate.
Source: Token terminal
Bloomberg analyst Eric Balchunas he said JPMorgan’s JLTXX is also a “big deal” because the 0.16% fee is low for a money market fund with stable asset values.
JPMorgan Blockchain Use Cases
The JLTXX launch follows JPMorgan’s first tokenized product, My OnChain Net Yield Fund, or MONY, which launched in December and also runs on Ethereum. MONY holds short-term debt securities designed to deliver returns in excess of bank deposit rates, with interest and dividends accrued daily.
The JLTXX filing also follows a pilot transaction that JPMorgan participated in last week, in which the first tokenized US Treasury fund was moved from the US via the XRP Ledger and interbank rails to one of JPMorgan’s Singapore bank accounts in seconds.
In April, Morgan Stanley launched the Stablecoin Reserves Portfolio, which allows stablecoin issuers to park the reserves backing their fiat-pegged tokens in one of the bank’s money market funds while earning interest.
Related: Stablecoins act like FX markets when liquidity is shared: Eco CEO
However, the International Monetary Fund highlighted several concerns about tokenization in a report in April, arguing that tokenization shifts risk from the banking system to shared ledgers and smart contracts, making it harder to intervene during “stress events.”
The IMF added that without legal clarity on ownership records and settlement finality, tokenized markets risk being “fragmented and peripheral”.
Several industry experts, including “Shark Tank” investor Kevin O’Leary, said crypto market structure legislation — such as the CLARITY Act — is needed to address these issues.
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