JPMorgan to Introduce Tokenized Money-Market Fund Utilizing Ethereum, Infusing $100M in Initial Capital: WSJ

JPMorgan Chase is set to launch its inaugural tokenized money-market fund on the Ethereum blockchain. They plan to start with $100 million of their own capital before inviting external investors.

Key Takeaways

JPMorgan is launching a tokenized money-market fund named the My OnChain Net Yield Fund (MONY).
The fund will commence with a $100 million investment from JPMorgan.
It targets qualified investors, with a minimum investment requirement of $1 million.
The launch follows the passage of the GENIUS Act, promoting tokenization in finance.
Investors can participate via JPMorgan’s Morgan Money platform, receiving tokenized shares.

JPMorgan

JPMorgan Brings Money Markets Onchain

According to a report by the Wall Street Journal, JPMorgan Chase’s asset management division, which manages approximately $4 trillion, is launching the My OnChain Net Yield Fund, referred to as “MONY.” This private fund is created using JPMorgan’s proprietary tokenization platform, Kinexys Digital Assets. Initially, the bank will invest $100 million of its own funds before the offering is extended to external investors starting Tuesday.

The fund targets qualified investors, specifically individuals with a minimum of $5 million in investable assets and institutions with at least $25 million. Investors must commit at least $1 million to participate.

Tokenization Gains Momentum After GENIUS Act

The launch aligns with a growing interest in tokenized financial products, notably following the GENIUS Act's enactment earlier this year. This legislation introduced a regulatory framework for dollar-backed stablecoins in the U.S., diminishing previous uncertainties regarding onchain settlements and digital forms of traditional assets.

Since the Act's passage, several Wall Street firms have ramped up efforts to tokenize a variety of assets, including stocks, bonds, and physical properties, recognizing blockchain's potential to enhance operational efficiency, decrease settlement durations, and broaden investor access.

“There is a massive amount of interest from clients around tokenization,” commented John Donohue, head of global liquidity at J.P. Morgan Asset Management, in an interview with the WSJ. “We anticipate taking a leadership role in this area and collaborating with clients to ensure our product offerings reflect the choices available in traditional money-market funds through blockchain technology.”

How the MONY Fund Works

Investors can subscribe to the MONY fund using JPMorgan’s Morgan Money digital platform, designed for money-market investments. In exchange for their investment, they receive digital tokens that represent their shares in the fund, which are stored in their crypto wallets.

Similar to conventional money-market funds, MONY allocates investments into baskets of high-quality, short-term debt instruments. The fund generates daily dividends, distributing interest designed to match current money-market yields, which have been particularly favorable in the context of a high-interest rate environment.

Stablecoins and Institutional Adoption

Investors can make subscriptions and redemptions using cash or USDC (a dollar-pegged stablecoin from Circle Internet Group). This option to settle in USDC illustrates the increasing integration of crypto-friendly payment systems into regulated financial products.

JPMorgan’s initiative complements its broader blockchain strategy that encompasses tokenized deposits, onchain settlements, and wholesale payment infrastructure. While initially available only to institutional investors and high-net-worth individuals, this move signifies a growing trend towards the incorporation of blockchain technology into essential financial products that were once considered distant from the world of cryptocurrency.