Schroders has received regulatory approval for the firm’s first tokenised share class of a US dollar money market fund.
The asset manager has secured approval from the Central Bank of Ireland to launch this fund with a tokenised share class.
This comes as there is increased demand from institutional investors for digital asset solutions, with a view to enhance operational efficiency and reduce costs.
This launch comes as a number of pension providers and technology platforms have explored ways that tokenisation can support innovation in the DC sector. To date most tokenisation initiatives have focused on highly liquid assets, such as money market funds and less liquid assets such as infrastructure and other private market funds.
Schroders says that clients will be able to use smart contracts — programmes deployed on a blockchain that execute automatically when set conditions are met – to execute secure and transparent redemptions and transfers on these tokens via JP Morgan’s Kinexys platform, a multi-chain asset tokenisation platform.
This latest launch follows Schroders Capital’s announcement it will integrate a tokenised capability into its insurance-linked securities (ILS) investment platform earlier this year.
Schroders chief financial officer tder Meagen Burnett says: ““By combining money market investments with the benefits of distributed ledger technology, we are offering investors a new level of access, efficiency and security. This milestone is a testament to our commitment to developing world-class solutions that meet the evolving needs of investors in the digital age.”