- Banking giant JPMorgan unveils the MONY tokenized fund, featuring high yields and daily dividends.
- The institution has injected a $100 million in capital into the product before its public launch on Tuesday.
- The tokenized fund is only available to qualified investors with a $1 million minimum investment.
JPMorgan continues to go all-in on blockchain technology. On Monday, the banking giant launched its tokenized money-market fund.
The move comes hot on the heels of the bank’s launch of the JPM Coin, a deposit token for its institutional clients.
MONY by JPMorgan
According to the Wall Street Journal (WSJ), JPMorgan operates the new investment product on the Ethereum (ETH) network. It initially seeded the vehicle, called My OnChain Net Yield Fund (MONY), with $100 million in funding before a broader rollout to outside investors on Tuesday.
JPMorgan’s Kinexys Digital Assets platform, the bank’s institutional platform for tokenizing financial assets on a permissioned blockchain, will support MONY. The fund is comprised of short-term debt securities with yields higher than regular bank deposits. It is also interest-bearing, entitling investors to daily dividends. Holders can use cash or Circle’s USDC stablecoin for subscription and redemption in MONY.
However, MONY will only be exclusive to qualified investors, or those with at least $5 million in investments. Meanwhile, institutions with a minimum of $25 million can only avail of the product. JPMorgan requires a $1 million minimum investment for MONY.
John Donohue, head of global liquidity at JP Morgan Asset Management, stated that tokenized products have been attracting a “massive amount of interest” from clients. Hence, he revealed that their company aims to be a leader in the field by bringing traditional money-market funds to the blockchain.
An Over $7 Trillion Market
A money market fund is a type of mutual fund. It invests in high-quality, short-term debt securities such as Treasury bills, commercial paper, and certificates of deposit. The product carries a low risk because it focuses on high-quality, short-term instruments. Additionally, it offers modest income for investors, but is typically higher than that of traditional savings accounts.
Money market funds have been around since 1971. The Investment Company Institute (ICI) estimates that inflows in the industry have already reached over $7 trillion this year, marking a historic high. Shelly Antoniewicz, Chief Economist of the ICI, noted that the spike in volatility of the financial markets and high short-term interest rates have increased the demand of retail and institutional investors in money market funds.
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