JP Morgan to launch $100-million token fund on Ethereum: Report
In a significant development, JPMorgan Chase’s $4 trillion asset-management division is set to launch its first tokenised money-market fund, named My OnChain Net Yield Fund or ‘MONY’, on the Ethereum blockchain. According to a report by the Wall Street Journal, the bank will initially seed the vehicle with $100 million capital before opening it to external investors from December 16. The minimum investment size is set at $1 million.
This move marks a significant milestone in the adoption of blockchain technology in the financial sector. JPMorgan, one of the largest banks in the world, is taking a bold step by launching a tokenised fund on a public blockchain like Ethereum. The fund will allow investors to purchase and trade tokens representing a claim on the underlying assets, which will be held in a custody account.
The My OnChain Net Yield Fund (MONY) will be a money-market fund, which means it will invest in low-risk, short-term debt securities, such as commercial paper and treasury bills. The fund will aim to provide a competitive yield to investors while maintaining a high level of liquidity. By tokenising the fund, JPMorgan is able to offer a more efficient and transparent way of investing in traditional assets.
The use of blockchain technology will allow for real-time settlement and custody of the tokens, reducing the need for intermediaries and increasing the speed of transactions. Additionally, the Ethereum blockchain will provide a transparent and tamper-proof record of all transactions, giving investors confidence in the integrity of the fund.
The launch of MONY is also significant because it marks one of the first times a major bank has launched a tokenised fund on a public blockchain. Most tokenised funds to date have been launched on private blockchains or permissioned networks, which are not accessible to the general public. By launching on Ethereum, JPMorgan is opening up the fund to a wider range of investors and paving the way for greater adoption of blockchain technology in the financial sector.
The minimum investment size of $1 million may seem high to some investors, but it is relatively low compared to other institutional investment products. This suggests that JPMorgan is targeting a wide range of investors, from family offices to pension funds and other institutional investors.
The launch of MONY is also a vote of confidence in the Ethereum blockchain, which has been facing scalability and regulatory challenges in recent years. The fact that a major bank like JPMorgan is willing to launch a tokenised fund on the network suggests that Ethereum is becoming increasingly attractive to institutional investors.
In conclusion, the launch of JPMorgan’s $100-million token fund on Ethereum is a significant development in the adoption of blockchain technology in the financial sector. The use of blockchain technology will provide a more efficient, transparent, and secure way of investing in traditional assets, and the launch of MONY is a major step forward for the industry. As the fund becomes available to external investors from December 16, it will be interesting to see how the market responds to this innovative new product.
About the Author
