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The Bank of New York Mellon (NYSE:BK), also known as BNY, is teaming up with Goldman Sachs Group (NYSE:GS) to use blockchain technology developed by Goldman to keep a record of customers’ ownership of certain money market funds (“MMF”), a step that will facilitate the transferability of existing MMF shares, the companies said on Wednesday.
Investors can subscribe and redeem MMF shares through BNY’s LiquidityDirect platform, which offers connectivity to GS DAP via integration with BNY’s (NYSE:BK) Digital Assets platform. BNY will continue to maintain the official books, records, and settlements for the funds within currently approved guidelines, while also enabling mirror tokens on GS DAP.
BlackRock (BLK), Federate Hermes (FHI), Fidelity Investments, BNY Investments Dreyfus (BK), and Goldman Sachs (NYSE:GS) Asset Management will participate in the initial launch.
“Mirrored tokenization of MMF shares is a first step in this transition, and we are proud to be at the forefront of this first-of-its-kind initiative,” said Laide Majiyagbe, global head of Liquidity, Financing and Collateral at BNY (BK).
“Using tokens representing the value of shares of Money Market Funds on GS DAP would enable us to unlock their utility as a form of collateral and open up more seamless transferability in the future,” said Mathew McDermott, global head of Digital Assests at Goldman Sachs (GS).
Goldman Sachs (GS) stock gained 2.3%, and BNY (BK) rose 0.7% in late Wednesday trading.
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