We are taking a deeper dive into JP Morgan’s digital asset strategy which includes their internal launch of a tokenized money market fund and adoption of the Ethereum blockchain platform. Major money center banks are developing their own digital asset solutions rather than solely relying on specialty providers, which may gradually move crypto-focused companies to the periphery of the bank ecosystem.
Let us explain.
J.P. Morgan Asset Management, which oversees $4 trillion in assets, launched its first tokenized money market fund called My On Chain Net Yield Fund (MONY) on December 15, 2025. This fund operates on the public Ethereum blockchain and is powered by the bank’s Kinexys Digital Assets platform.
MONY competes with popular stablecoins like Tether‘s USDT and Circle‘s USDC, which together back billions of dollars in zero-yield tokens used for crypto transactions (redeemable 1:1 for cash). Tether and Circle keep the interest earned on their reserves, generated during the brief period between receiving funds and issuing tokens, rather than passing it on to holders.
In contrast, MONY is a tokenized share in a traditional money market fund. It combines the rapid settlement of blockchain with the ability to earn yield. This yield feature is now restricted for “payment stablecoins” under new U.S. regulations.
What is The Genius Act?
The Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) was signed into law in July 2025. It establishes the first federal regulatory framework for payment stablecoins (cryptocurrencies pegged to stable assets like the U.S. dollar).
A key provision: It prohibits issuers of regulated payment stablecoins from paying interest or yield directly to token holders.
What about me?
For corporate treasurers, crypto funds, or anyone holding large stablecoin balances for extended periods (weeks or months), the lack of yield creates an opportunity cost of about 5% which could be categorized as a “stablecoin tax” annually when short-term rates are in the mid-single digits.
MONY avoids this restriction because it is not classified as a payment stablecoin. Instead, it is structured as Rule 506(c) private placement money market fund:
- Available only to accredited (qualified) investors.
- Invested in safe assets like U.S. Treasuries and fully collateralized Treasury repurchase agreements (repos).
- Designed to pass through most of the earned yield to shareholders (after fees), rather than retaining it all at the issuer level.
This approach allows institutions to hold “cash-like” assets on-chain with blockchain benefits, such as faster transfers, greater transparency, and potential for broader use as collateral, while still earning competitive returns.
Collateral access.
The growing popularity of the globally accessible 24/7 digital asset exchanges like COIN and Kraken Crypto trading desks all require constant access to margin and collateral. Stablecoins such as USDT and USDC have served as the go-to option due to their speed and wide acceptance across platforms. However, in the current interest rate environment, these zero-yield stablecoins become less capital-efficient, as holders forgo potential returns on idle balances.
Tokenized money market funds (MMFs) address this inefficiency directly. For example, rather than holding millions in non-yielding stablecoins, trading desks and funds can allocate to MMF tokens backed by conservative short-term government assets, like U.S. Treasuries. These tokens enable blockchain-speed transfers between approved venues while generating yield.
BlackRock‘s BUIDL fund has led the way, evolving from a tokenization experiment into a core funding tool after gaining acceptance as collateral on major institutional trading platforms. J.P. Morgan’s MONY takes a similar approach but with a distinct focus: it integrates tightly with the bank’s Kinexys Digital Assets infrastructure and existing Morgan Money liquidity platform, targeting traditional clients such as pensions, insurers, asset managers, and corporates already using conventional money market funds.
A good defense wins.
MONY serves as a defensive strategy against the growing presence of new fintech offerings that target trillions of dollars in both corporate and customer deposits. Particularly over the last five years, low-cost and innovative fintech and digital asset services have started to erode the profits of traditional financial institutions in areas like treasury operations, custody, payments, and foreign exchange.
The launch of a tokenized money-market fund on public rails, allows the company to pull back some of those migrated funds inside its ecosystem. Not only does JPM recapture its own clients’ business but can also reclaim itself as the end-to-end trusted steward for trillions of liquid assets.
In summary, J.P. Morgan’s MONY represents a strategic blend of traditional finance and public blockchain infrastructure, capitalizing on regulatory changes to offer a yield-bearing alternative that traditional payment stablecoins can no longer provide. This could accelerate the shift of institutional liquidity toward tokenized real-world assets.
