Northern Trust Asset Management has launched a tokenized share class of its NIF Treasury Instruments Portfolio, marking its entry into the digital assets market. The structure uses distributed ledger technology to maintain a digital mirror of share ownership while the underlying portfolio continues to invest in short-term U.S. Treasurys.
The tokenized shares will initially be offered through BNY’s LiquidityDirect platform, which operates on Goldman Sachs’ Digital Asset Platform. The fund itself does not run on blockchain nor does it invest in crypto assets; instead, authorized intermediaries are expected to keep a blockchain-based mirror of ownership records for clients.
The NIF Treasury Instruments Portfolio invests in a diversified pool of short-term U.S. Treasury instruments and seeks to maintain a $1.00 per-share value, though it is not FDIC-insured and may lose value.
Northern Trust Asset Management is the asset management arm of Northern Trust Corporation and manages about $1.4 trillion in assets as of Dec. 31, including $355 billion in liquidity strategies. The launch represents the firm’s entry into the digital assets market.
Tokenized money market funds use blockchain technology to represent traditional money market portfolios, providing investors on-chain access to short-term, yield-bearing assets such as U.S. Treasurys.
Tokenized Treasury funds expand
Tokenized money market funds have become a major application of blockchain in traditional finance. By using blockchain-based ownership records, these funds aim to improve settlement and transfer efficiency.
According to RWA.xyz data, nearly $11 billion in U.S. Treasury debt is currently represented on public blockchains, making it the largest category of tokenized real-world assets. Large asset managers dominate the segment: BlackRock’s USD Institutional Digital Liquidity Fund holds about $2.2 billion in tokenized Treasurys exposure, followed by Franklin Templeton’s OnChain US Government Money Fund at just over $920 million.
Other firms have added features to the model. On Feb. 24, WisdomTree introduced 24/7 trading and instant settlement for its WisdomTree Treasury Money Market Digital Fund (WTGXX), enabling round-the-clock secondary trading of a registered tokenized mutual fund under the Investment Company Act of 1940.
As the sector grows, central banking bodies are examining potential risks. In November, the Bank for International Settlements warned that tokenized money market funds could introduce operational and liquidity vulnerabilities if redemptions accelerate or on-chain liquidity thins.
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