BlackRock and JPMorgan deepen race for tokenized treasury assets

Traders Union
All News
Crypto
BlackRock and JPMorgan push treasury reserves

Highlights

BlackRock and JPMorgan are targeting stablecoin reserves through tokenized money market funds.
JPMorgan has launched JLTXX on Ethereum and will invest $100 million in the fund at launch.
The tokenized Treasury market is estimated at about $13.9 billion.

Ethereum becomes the main platform

According to CoinGape, BlackRock and JPMorgan are preparing products that would allow part of stablecoin reserves to be held in tokenized Treasury instruments. This format has gained more attention after the passage of the GENIUS Act, which opened the door for stablecoin issuers to use tokenized money market funds as reserve assets.

The market for tokenized U.S. Treasuries is worth about $13.9 billion. Ethereum accounts for more than 50% of activity, while BNB Chain follows with a share of more than 20%. Ethereum’s position looks stronger because it already has the highest concentration of stablecoins and tokenized Treasury products.

JPMorgan has already announced the launch of its second tokenized money market fund on public Ethereum. The JPMorgan OnChain Liquidity-Token Money Market Fund, or JLTXX, is available to qualified investors through Morgan Money and is designed to support stablecoin issuers under the GENIUS Act. JPMorgan Asset Management is investing $100 million in the fund at launch, with Anchorage Digital also taking part. The fund invests only in U.S. Treasuries and overnight repurchase agreements fully backed by Treasuries or cash.

BlackRock, meanwhile, is focused on adding blockchain-based records to an existing liquidity fund worth about $7 billion. The company has also filed documents for a new structure aimed at stablecoin reserves. Both products are designed for Ethereum and continue BlackRock’s broader push into tokenized Treasury products.

Reserves become a new battleground

Stablecoin issuers need to hold reserves in safe and liquid assets, and short-term U.S. Treasury instruments have already become a natural basis for that backing. If these assets can be held and transferred in tokenized form, banks and asset managers gain access to a new source of fees and liquidity.

JPMorgan says about $30 billion in traditional assets have already been tokenized on public blockchains, while assets in on-chain products have nearly tripled since the start of 2024. At the same time, the tokenized Treasury segment is estimated at $13.9 billion. It remains a small part of the global market, but it is already large enough to attract competition among major financial players.

As previously covered, BlackRock calls for greater flexibility in stablecoin reserve requirements.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.