Northern Trust enters tokenized Treasurys fund market
The major US asset manager Northern Trust has announced the launch of a new share class for its money market fund that utilizes blockchain technology to record and administer investments in US Treasurys. This move signifies the growing interest in adopting distributed ledger technology within the traditional financial industry.
According to the announcement, the new share class of the Northern Trust US Government Select Money Market Fund will allow investors to gain direct exposure to US Treasurys tokenized on the blockchain. This has become possible through Northern Trust's partnership with Onchain Custodian, a provider of digital asset custody services.
Northern Trust's solution represents an important step towards wider adoption of blockchain technology in the asset management sector. The transition to a blockchain-based infrastructure allows for optimized accounting, reporting, and transactions with Treasury bonds, enhancing transparency and efficiency of these processes.
It's worth noting that the market for tokenized government bonds has already reached significant scale - the total volume on-chain is estimated to be approaching $11 billion. Thus, Northern Trust is becoming one of the first major players to offer its clients direct access to this rapidly growing segment of digital assets.
Expert opinion
The launch of Northern Trust's new blockchain-oriented structure for its money market fund is a logical step in the digitalization of the financial industry. Distributed ledger technology opens up broad opportunities for optimizing the accounting, settlement, and custody of assets, such as government bonds. As more investors seek exposure to this segment, we expect that other large asset managers will follow Northern Trust's example and offer similar blockchain-based products to their clients.