Europe’s largest asset manager, Amundi, has made a groundbreaking move in the financial world by introducing its first tokenized share class for a euro money market fund. This innovative solution offers investors access to both traditional and blockchain-based versions of the fund, with the first transaction recorded on the Ethereum network on November 4th. The collaboration with CACEIS, a European asset servicing group, ensures the efficient operation of this new structure. Key advantages include streamlined order processing, wider investor reach, and 24/7 trading capabilities.
This fund holds short-term, high-quality euro-denominated debt, primarily consisting of money-market instruments and overnight repurchase agreements with European sovereigns. Amundi, a global financial powerhouse managing over $2.3 trillion in assets and serving over 100 million clients, is at the forefront of this innovative shift.
Recent developments in tokenized funds are accelerating growth. BlackRock and Franklin Templeton have driven significant increases in tokenized US Treasury fund investments, with BlackRock’s onchain product currently holding $2.3 billion in assets, and Franklin Templeton’s money market fund exceeding $826 million in assets. Both companies have expanded their tokenization platforms across various blockchains.
The use of blockchain for tokenized money market funds has seen significant adoption, with the value reaching $9 billion by October 2023, according to a recent report from the Bank for International Settlements (BIS).
However, the report also highlights potential vulnerabilities related to using tokenized Treasury portfolios as collateral. This highlights the ongoing need for careful regulation and analysis within this growing sector.