With the passage of the GENIUS Act last year, the idea of a new form of on-chain cash equivalent is gathering momentum. While the Act was written with stablecoins in mind, giving on-chain dollars a legal framework presents a potential new use case for money market funds (MMFs): they can function as tokenised liquidity, while still working as secure, yield-earning vessels. The challenge for funds is to bring their operational models in line with the bright future this change offers.
What the Act does, and what it doesn’t
The GENIUS Act grants stablecoins something they have lacked: a clear footing as regulated payment instruments. The Act also allows stablecoin issuers to hold tokenised money market fund shares among their reserve assets, drawing the two instruments closer together.
Stablecoin issuers are prohibited, however, from paying interest or yield to the people who hold their coins. A treasurer holding a regulated stablecoin holds a dollar; the yield earned on the assets backing that coin accrues to the stablecoin issuer, not the holder.
A tokenised money market fund flips that arrangement. The MMF settles with the same on-chain efficiency, but because it is a fund share rather than a coin, it distributes returns to the investor at money market rates.
The GENIUS Act does not regulate tokenised money market funds directly. Instead, it creates the conditions for their wider adoption by allowing regulated stablecoin issuers to hold eligible tokenised money market fund shares as reserve assets. While MMFs will remain subject to strict SEC Rule 2a-7 requirements, the door to their expanded utility is open.
The market is already moving
While there are still details to iron out, the market very much heard the intention behind the Act. Total value in tokenised money market funds rose from roughly $770 million at the end of 2023 to almost $9 billion by the end of October 2025. The pace has not slowed since: it has been reported that the broader tokenised US Treasury market passed $10 billion in January 2026. Meanwhile, participation has expanded from early pioneers to widening engagement.
BlackRock’s BUIDL fund, launched in March 2024, passed $2 billion in assets within its first year and remains among the largest products in the market, but it’s facing competition. J.P. Morgan brought its own tokenised money market fund to a public blockchain in December 2025, and Circle’s USYC reportedly overtook BUIDL in January 2026. The character of the market has shifted with it, from a handful of managers pushing to prove a concept toward major institutions moving from pilot to live product.
Why the momentum matters
Beneath the numbers is a change in the value of what an MMF can do. As we’ve covered elsewhere, they can now behave like cash itself: move instantly, settle transactions, and keep earning until the moment they are spent.
Today, a company holding cash in a fund must redeem its shares, wait for the proceeds to reach its bank account, and wire the money to its counterparty, who then reinvests. Capital sits idle, interest is lost.
Where both parties hold the tokenised fund, the payment becomes a transfer of tokens, and both sides continue to earn yield up to the point of settlement. This is the efficiency stablecoins promised, delivered by a regulated, yield-bearing instrument.
For asset managers, tokenisation represents more than an opportunity to modernise settlement. New digital distribution channels could provide access to previously underserved investor segments, expand the use cases for existing liquidity products and create opportunities to attract additional assets under management. Capturing that growth will require operational infrastructure capable of supporting new business models without introducing unnecessary complexity.
That capability is arriving as a new generation of digitally native treasurers now treat on-chain settlement as the default.
The hurdles between here and there
The first major hurdle is interoperability. As the value proposition shifts from holding tokenised assets to transacting with them, products limited to a single blockchain may struggle to meet demand across different environments without duplicating infrastructure.
Yet interoperability is only one part of the challenge. Asset managers must also consider how tokenised transactions integrate with existing fund accounting, transfer agency, investor servicing, compliance and reporting processes. As digital markets evolve, this may also require integration with emerging payment and settlement mechanisms, including stablecoins, depending on the underlying product and distribution model.
Supporting traditional and digital distribution channels without creating parallel operating infrastructures will be critical to delivering the efficiencies tokenisation promises. This requires infrastructure capable of tokenising existing fund shares while connecting on-chain activity with established servicing processes, maintaining regulatory oversight and investor protection.
This transition is already beginning. Established asset managers are making traditional liquidity funds available through tokenised distribution channels, demonstrating how existing products can access on-chain markets without requiring a complete overhaul of their operating models.
At SS&C and Calastone, this has meant developing digital transfer agency capabilities that support the tokenisation and ongoing servicing of fund shares, connecting traditional and on-chain activity within a unified operating model. This also includes the ability to accommodate emerging settlement mechanisms, including stablecoins.
Ultimately, competitive advantage may depend less on being first to launch a tokenised fund and more on the ability to deliver these capabilities at scale.
The prize
While the AUM of tokenised funds today remains a small fraction of the roughly $9 trillion held in traditional money market funds, forecasts from McKinsey indicate tokenised assets could reach $2 trillion by 2030. As tokenised money market funds become part of mainstream treasury and investment workflows, the focus will shift from proving the technology works to ensuring products can be integrated, serviced and governed alongside traditional financial infrastructure.
The best positioned to succeed will be those combining new digital distribution capabilities with the operational expertise needed to deliver reliable, scalable and sustainable growth.
(First Published in Global Custodian, October 2026)
