Moody’s finds growing institutional demand for tokenized money market funds, citing benefits in liquidity, compliance and operational efficiency.
Tokenized short-term funds, a new class of digital financial products bridging traditional and decentralized finance, have grown to reach $5.7 billion in assets since 2021, according to a new Moody’s report.
The credit rating service sees growing interest from traditional asset managers, insurers, and brokerages looking to offer clients access between fiat and digital markets. “Tokenized short-term liquidity funds are a small but rapidly growing product,” notes a June 3 report shared with Cointelegraph.
These funds, typically backed by US Treasurys or other low-risk assets, operate similarly to traditional money market funds but use blockchain to issue and manage fractional shares, enabling real-time settlement. Data from the Federal Reserve shows that US money market funds held approximately $7 trillion in total assets as of December 2024.
