JPMorgan Files for Tokenized Money Market Fund on Ethereum Blockchain

In brief, JPMorgan is the latest financial firm seeking to launch a tokenized money market fund, filing for JTLXX. Its tokenized product will rely on its own blockchain platform, which creates a permissioned layer on top of Ethereum. The launch follows that of BENJI, a tokenized money market fund from Franklin Templeton that is available on multiple blockchains. Global banking giant JPMorgan is establishing a new blockchain product, JLTXX—an on-chain money market fund that will have a connection to the Ethereum blockchain. The fund, called the JPMorgan OnChain Liquidity-Token Money Market Fund, will invest only in U.S. treasury bills, bonds, and notes, according to the fund’s filing with the SEC. The fund will be powered by JPMorgan’s Kinexys Digital Assets unit. According to the filing, the KDA technology it utilizes will “create a permissioned system” that sits on top of public blockchains, in this case Ethereum. In the future, though, it may expand to other networks. “The Ethereum blockchain, a public blockchain network, is currently the only available blockchain for use by investors, although expansion to other blockchains is anticipated in the future,” the filing reads. While the fund notes interest rate changes and general market risks among things investors need to be aware of, it also highlights “blockchain technology risk” as one of a handful of main risks associated with investing in the fund, calling it a “relatively new and untested technology.” The blockchain not working as intended, regulatory concerns related to the technology, and undiscovered technical flaws are all present risks associated with the fund’s connection to blockchain, according to the filing. The initiative is the latest for the banking giant within crypto. Last week, tokenization firm Ondo Finance announced it worked with JPMorgan’s Kinexys platform, Ripple, and Mastercard to settle tokenized treasuries on the XRP Ledger—the native blockchain of the Ripple-linked XRP token. JPMorgan’s upcoming tokenized money market fund product joins BENJI, a competing tokenized money market offering from financial firm Franklin Templeton, which is accessible on a broader range of blockchains, including BNB Chain, Canton, and Avalanche. Shares in JPMorgan (JPM) jumped 1.63% on the day, closing at $304.88.