Tokenized money market funds, explained
A tokenized money market fund is a regular money market fund, holding short-term US Treasuries and similar safe instruments, whose shares exist as tokens on a blockchain. Each token represents one share, targeting a steady value, and pays daily yield on-chain. BlackRock's BUIDL and Franklin Templeton's BENJI lead the category, which crossed billions of dollars by 2026. This guide explains how they work and the risks, and is educational, not investment advice.
Of all the real-world assets moving onto blockchains, money market funds turned out to be one of the most consequential, and one of the least flashy. A money market fund is a conservative investment that holds short-term, safe instruments like US Treasury bills and aims to keep a steady value while paying modest yield. Tokenizing one puts its shares on a blockchain, and by 2026 the world's largest asset managers had done exactly that at scale. This guide explains what these products are and why they matter.
What a tokenized money market fund is
A tokenized money market fund holds the same underlying portfolio as a conventional one, short-term US Treasuries, overnight repos, and similar safe, liquid instruments, with a value targeted at one dollar per share. The difference is purely in how the shares are recorded and moved. Instead of existing only on a fund administrator's private ledger, each share is represented by a token on a blockchain, so ownership lives on-chain and can be transferred with the speed and programmability of crypto.
In other words, the fund is traditional and regulated, but its shares wear a blockchain wrapper. One token equals one share, and the token's value tracks the fund's net asset value, the steady per-share value the fund maintains. This is a very different kind of token from a volatile cryptocurrency: it is a claim on a conservative, yield-bearing fund, designed to be stable, not to swing.
Why asset managers moved on-chain
The big asset managers did not embrace blockchain out of ideology. They did it to solve an operational problem. Traditional fund shares settle slowly, trade only during market hours, and move through layers of intermediaries, transfer agents, custodians, clearing organizations. Putting shares on a blockchain lets them settle near-instantly, move at any hour, and be transferred peer-to-peer, which is useful for cash management and for using the shares in other ways.
One of the most important uses emerged from regulation. Because rules now let stablecoin issuers hold tokenized money market fund shares as part of their reserves, and because these tokens earn yield while sitting in a wallet, they became attractive as productive, on-chain reserve and collateral assets. A token that holds a steady value, pays daily yield, and settles instantly is a powerful building block, which is why institutions raced to offer them.
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Two products define the category. BlackRock's tokenized fund, known as BUIDL, launched in 2024 with the firm Securitize handling the share administration, and grew into the largest tokenized Treasury product, measured in billions of dollars across many blockchains. It pays its yield by minting additional tokens into holders' wallets daily and has high minimums aimed at institutions. When the world's largest asset manager put its name behind an on-chain fund, it signaled the category had arrived.
Franklin Templeton got there first. Its tokenized money market fund, known as BENJI, launched back in 2021 and expanded across many blockchains, with each token equal to one share at a one-dollar value and daily rewards accruing on-chain. Others, including major banks, have since launched competing tokenized funds, some designed specifically to serve as compliant reserves for stablecoin issuers. The common thread is traditional finance using blockchain rails for a conservative, yield-bearing product. Our tokenized Treasuries guide covers the closely related Treasury side.
The risks worth understanding
The underlying fund is conservative, but the tokenized layer adds its own risks that the safe portfolio does not erase. There is counterparty and issuer risk: your claim depends on the legal structure behind the token and whether it entitles you to the underlying shares, especially in a bankruptcy. There is smart-contract risk in the token itself, redemption-delay risk if converting back to cash is not instant, and access restrictions, since these products are typically gated by know-your-customer rules and often limited to qualified or institutional investors.
So a tokenized money market fund is best understood as a conservative traditional product wrapped in blockchain plumbing, carrying the modest risks of the fund plus the newer risks of the wrapper. It is not a high-yield play and not a stablecoin, though it can resemble one. As with everything here, this is educational context, not investment advice, and these products are restricted by jurisdiction and investor type.
Following these on a price ticker
Tokenized money market funds are designed to hold a steady value rather than appreciate, so like a stablecoin the interesting thing to watch is stability around their target value, not price gains. They sit within the broader real-world-asset theme that CoinNotch can help you follow at a glance where prices are public.
For the wider picture, see the RWA overview, the closely related tokenized Treasuries guide, and to understand how these differ from dollar tokens, RWA versus stablecoins.