Tokenization's Breakout Asset Class: Tokenized Money Market Funds

Tokenized Money Market Funds (MMFs) emerged as the breakout asset class in 2025, transitioning from an experiment to a functional part of institutional infrastructure, driven by banks and asset managers. Assets Under Management (AUM) grew 110% to $8.6 billion by November 2025, and they now represent about 3% of the stablecoin market. Major institutions like JPMorgan, BlackRock, and Lloyds are already incorporating tokenized MMFs into operations, such as using them as collateral or for FX derivatives.

The acceleration expected in 2026 is based on four key catalysts: regulatory validation (like CFTC recommendations for tokenized MMFs as eligible collateral), institutional legitimacy demonstrated by 70 institutions, the rise of tokenized cash rails at major banks (Citi, HSBC, DBS) enabling seamless settlement, and regulatory momentum for USD and EUR stablecoins which will provide a default cash rail for public chains. Ultimately, tokenized MMFs are becoming the core cash management and collateral solution, bridging traditional assets with digital settlement rails.

(Source：CoinDesk)