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Writer's pictureHarvey

Financial Services Tokenized Series: How will tokenized MMFs scale to trillions AUM? pt.2

Updated: Nov 17

We have looked at in detail the three use cases for tokenized MMFs that will help it scale in traditional markets. But what exactly is the opportunity size for MMF in corporate treasury and derivatives trading market segments? We will quantify that in this article. 


Since the publication of our last post, another interesting data point came up. Fidelity International tokenized its own MMF on JPMorgan’s Onyx blockchain and used JPMorgan’s Tokenized Collateral Network as the technology solution to enable posting its MMF shares as collateral.


Looks like the institutional adoption of MMF tokenization is picking up steam.


In this week’s newsletter, we will look at 


  • US corporates cash holdings and composition 

  • Global derivatives trading volume and initial margin requirement


…to gauge the relevant market opportunity size for tokenized MMF as


  • a better cash management tool

  • a more powerful derivatives collateral management tool


For those of you who want a short cut answer, here are high-level conservative estimates.



If you want to know how to arrive at these estimates, let’s dive in.


A Superior Cash Management Tool

We have identified in our previous post tokenized MMFs superior capability as a cash management tool for corporations due to its faster settlement and always-on infrastructure. 


But how much cash do the US corporates hold? And how are they managing them?

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