Tokenized money market fund

A money market fund invests in very short-term, low-risk instruments such as Treasury bills and repos and pays out the interest. In the tokenized version, the fund is still a regulated vehicle run by an asset manager, but its share register lives on a blockchain, so each token represents a fund share that can be transferred, used in smart contracts or redeemed through the manager.

BlackRock's BUIDL and Franklin Templeton's BENJI are prominent examples. Crypto firms use these funds to earn yield on idle cash without leaving the chain, exchanges and prime brokers accept them as collateral for trading, and some stablecoin and DeFi projects hold them as reserves.

They are securities, not stablecoins. Access is usually restricted to qualified investors who pass identity checks, transfers can be limited to whitelisted wallets and the token price or balance changes as interest accrues. Holders depend on the fund manager, the transfer agent and the blockchain integration working smoothly, and redemptions follow fund rules rather than happening instantly.