The next frontier could lie in finding ways to work with MMF as data. Because of their underlying instruments, MMFs generate rich, continuous information about asset flows, exposures, and portfolio positions. It just takes channeling the data out of legacy pipes.

Tokenization adds value by making those flows visible in real time. The result brings the precision of a modern data network to the liquidity ecosystem, a significant advantage over a batch process.

Industry momentum

Several major financial institutions have moved from pilots to live implementations. Some recent examples include:

BNY Mellon and Goldman Sachs announced a mirrored record tokenization model in July 2025 to enable institutional viewing and processing of tokenized MMF shares.ⁱⁱ This approach preserves traditional fund structures while adding blockchain-based settlement optionality, serving as a pragmatic bridge between legacy systems and new infrastructure.
Franklin Templeton partnered with DBS Bank and Ripple in September 2025 to pilot a token on the XRP Ledger, enabling investors to trade it and use it for lending and collateral.ⁱⁱⁱ
In October 2023, J.P. Morgan's Onyx processed a transaction where Barclays used tokenized BlackRock MMF shares as collateral, demonstrating real-time settlement and liquidity mobility in live market conditions.^iv

How to make progress

While the benefits and momentum are clear, wider institutional adoption will require overcoming four challenges.

1. Integration with legacy systems. As incumbent technology, many treasury, fund accounting, and custody systems were built for predictable processing cycles. They rely on static cut-offs, daily NAV strikes, and SWIFT-based messaging. Some companies have innovated with APIs, but accessing the blockchain takes additional effort. Connecting blockchain settlement to their architecture means building custom interfaces to translate between on-chain smart-contract events and off-chain accounting systems, meaning working across two different time scales.

2. Governance and assurance. Blockchain adds transparency, but it also demands new controls. Operations teams must change their workflows to monitor settlement flows in real-time. Governance teams also need to adapt their permission models to define who can read, write, and approve transactions across shared ledgers while preserving segregation of duties. Finally, auditors and regulators will require verifiable, reproducible evidence that on-chain activity meets established standards such as SOX, SOC, and Rule 2a-7.

3. Legal and custodial clarity. Even though the fund structure remains under Rule 2a-7, key legal and custodial questions remain unresolved in order to ensure that a token equates to a share of the fund. Custodians also have to determine how to match token holdings to client statements while complying with segregation-of-assets rules. Finally, risk and legal teams need clear standards for how to handle events like default or bankruptcy.

4. Treasury inertia. For many treasurers, the current system works. Cash movements reconcile and audit neatly in the context of accounting systems, SOX sign-offs, and daily liquidity forecasts. Moving to real-time tokenized flows would require revalidating factors like counterparty limits and credit exposure, rewriting procedures, and retraining staff.

The path forward

Tokenized MMFs add new technology and capability to a tried and tested mechanism for liquidity. Blockchain has rapidly moved from the margins to pilots to institutional use. While barriers between systems, controls, and governance exist, they will likely erode quickly the faster standards and proof points accumulate.

Once more firms, counterparties, and providers embed tokenization into collateral, repo, and cash-management workflows and systems, this new generation will create tangible balance-sheet benefits, becoming a regular part of market efficiency in the coming decades.