Tokenized fund administration involves managing investment funds where assets or fund shares are represented as digital tokens on a blockchain. This approach streamlines operations such as investor onboarding, capital calls, distributions, and reporting through smart contracts. It aims to increase transparency, reduce administrative costs, and enhance liquidity for fund interests. The use of tokens digitizes traditional fund management processes.
Context
Tokenized fund administration is gaining traction as a means to modernize the investment management industry, particularly for alternative assets like real estate or private equity. Discussions often center on the regulatory clarity required for tokenized securities, the interoperability of blockchain platforms, and the legal frameworks for ownership and transfer. This innovation holds the potential to democratize access to investment funds and improve operational efficiency.
BNY Mellon established a regulated money market fund to provide stablecoin issuers with a compliant reserve asset, structurally mitigating systemic risk and optimizing capital efficiency.
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