Singapore-based fintech firm OpenEden said on Wednesday it has appointed BNY as the investment manager and primary custodian for assets backing its tokenised US Treasury fund.
Launched in 2023, the fund offers investors exposure to short-dated US Treasury bills and overnight reverse repurchase agreements by issuing blockchain-based “Treasury bill tokens.” It currently has nearly $300 million in assets under management.
Doni Shamsuddin, head of Asia Pacific at BNY Investments, said it marks the first time the US bank will provide both investment and custody services to a tokenised fund.
Under the arrangement, BNY will manage the portfolio and invest in Treasury bills, money market funds, and similar assets that will serve as the backing for the blockchain-issued tokens.
The move comes amid rising institutional interest in tokenised money market funds, as well as growing debate among major US banks over deeper engagement with crypto-related services following recent regulatory support.
Tokenisation — the process of converting financial assets such as deposits, stocks, bonds, and funds into blockchain-based tokens — has been gaining momentum globally, with advocates touting faster settlement times, greater transparency, and broader access for investors.
Earlier in July, Goldman Sachs and BNY said are preparing to roll out tokenized money market funds for institutional investors, as Wall Street steps further into blockchain-based finance.
Clients of BNY, the world’s largest custodian bank, will soon be able to invest in money market funds recorded directly on Goldman’s private blockchain.
The effort involves a number of heavyweight asset managers, including BlackRock, Fidelity, and Federated Hermes, as well as the investment arms of Goldman and BNY.
Unlike stablecoins, which are often banned from offering interest under new U.S. rules, tokenized money market funds provide yield. That makes them attractive to hedge funds, pensions, and corporates looking to park cash without giving up returns.
The push follows the recent passage of the GENIUS Act, which set new rules for stablecoins and banned interest-bearing versions. That’s likely to further accelerate interest in tokenized alternatives like these funds, which are typically backed by Treasurys or other low-risk assets.
Moody’s reported last month that tokenized short-term funds have reached $5.7 billion in assets since 2021, with asset managers and brokerages offering clients faster access between fiat and digital markets.
The race to put capital markets on blockchain is heating up. Robinhood recently unveiled plans for its own Ethereum-compatible chain that would allow around-the-clock trading of tokenized stock derivatives — a move seen as a challenge to the NYSE and other legacy venues.
