Federated Hermes Pushes for Tokenization of Money Market Funds

Federated Hermes, an American asset management company, manages assets worth $911 billion and plans to issue its first tokenized fund shares early next year. The company aims to expand the connection between traditional financial markets and on-chain finance by designing blockchain-based investment products that can be traded through existing brokerage accounts. Federated Hermes is set to launch a tokenized fund share class in collaboration with digital securities infrastructure firm Prometheum. The first tokenization target will be a money market fund (MMF), which can enhance asset transfer and settlement speeds while automating record-keeping. Prometheum will provide custody, clearing, and settlement services through its broker-dealer subsidiary registered with the U.S. Securities and Exchange Commission (SEC). Other brokerages can also use Prometheum's clearing platform to offer Federated Hermes's tokenized products to their clients. BlackRock, Franklin Templeton, and JP Morgan are also pursuing the tokenization of traditional financial products, and Citigroup projects that the tokenized securities market will reach $5.5 trillion by 2030.

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