JPMorgan files new tokenized Treasury backed fund on Ethereum

JPMorgan Asset Management filed to launch a second tokenized money market fund on Ethereum, deepening the bank’s push into blockchain based liquidity products for institutional investors.

The fund, called the JPMorgan OnChain Liquidity Token Money Market Fund, would trade under the ticker JLTXX. The filing says the fund seeks current income while maintaining liquidity and stability of principal. It is listed under JPMorgan Trust IV’s J.P. Morgan Money Market Funds prospectus, with Token Class shares dated May 13.

JLTXX would invest exclusively in US Treasury bills, bonds and notes, as well as overnight repurchase agreements fully collateralized by US Treasuries or cash. The fund aims to maintain a $1 net asset value and only invest in US dollar denominated securities.

The fund will use blockchain technology to let investors submit transaction requests for fund shares. Kinexys Digital Assets, a business unit within JPMorgan Chase Bank, will design, deploy and maintain the blockchain infrastructure used by the fund.

The product does not replace traditional fund recordkeeping. The transfer agent will maintain the official ownership record in book entry form, while token balances tied to investor blockchain addresses are intended to match fund shares one for one. If the blockchain balance and official register differ, the investor register remains the controlling record.

Ethereum is currently the only blockchain available for investors to use, though the filing says JPMorgan expects to expand to other blockchains in the future. The structure uses a permissioned system on top of public blockchains, meaning investors must use approved addresses before they can transact in token balances.

The filing follows JPMorgan’s launch of My OnChain Net Yield Fund, or MONY, its first tokenized money market fund on Ethereum. Barron’s reported that MONY was seeded with $100 million from JPMorgan and targeted qualified investors, marking the bank’s first move into tokenized money market products.

The new fund shows JPMorgan pushing tokenized cash products further into mainstream asset management. Instead of using Ethereum as the legal ownership layer, JPMorgan is using it as a transaction and token balance layer around a regulated money market fund.

Disclosure: This article was edited by Estefano Gomez. For more information on how we create and review content, see our Editorial Policy.