BIS report: Tokenized money market funds surpass $9 billion

ChainCatcher news, according to Cryptopolitan, the latest report from the Bank for International Settlements (BIS) points out that the total assets of tokenized money market funds have surged from $770 million at the end of 2023 to nearly $9 billion, becoming a key source of collateral in the crypto ecosystem.

The institution warns that although such assets possess the "flexibility of stablecoins," they also bring substantial operational and liquidity risks. BIS identifies liquidity mismatch as the main risk for tokenized money market funds. It notes that while investors can redeem tokenized fund shares daily, their underlying assets still follow the traditional T+1 settlement mechanism. During periods of market stress, concentrated redemption demands will expose this structural risk.

Subsequently, the organization pointed out that the market is still in its early stages of development, and solutions are continuously being improved. For example, fintech company Broadridge has launched a Distributed Ledger Repo (DLR) system, which enables same-day settlement of tokenized government bond transfers.