Tokenised Funds and Money-Market Products: The Fastest-Growing RWA Category

Tokenised funds and tokenised money-market products are the fastest-growing real-world-asset category in the current cycle. The combined outstanding base of the major regulated products — BlackRock's BUIDL, Franklin Templeton's BENJI, Ondo Finance's OUSG and a growing set of bank-issued tokenised cash-equivalent products — has grown substantially since 2023 and now represents a credible institutional product line rather than a pilot category. Several additional global asset managers have launched or publicly announced tokenised money-market or short-duration fixed-income products, and the trajectory points toward continued expansion.

This article covers why money-market tokenisation has moved ahead of other asset classes, how the product structures typically work, what the infrastructure stack looks like, and the treasury and regulatory implications for banks and asset managers. The target reader is a treasurer evaluating on-chain cash alternatives, an asset-manager operations lead scoping a tokenised share class, or a regulator assessing a product filing.

Several properties of money-market products make them particularly suited to tokenisation, and those properties largely explain why the category moved first.

Short-duration cash-equivalent exposure is a natural fit for on-chain treasury. Institutions and high-quality non-institutional participants in the on-chain ecosystem — exchanges, trading firms, stablecoin issuers — hold substantial cash and cash-equivalent positions in stablecoins that pay no yield. A tokenised money-market fund that invests in short-duration treasury securities and pays the accrual to holders offers a yield-bearing alternative that sits within a familiar product wrapper, with a familiar regulatory envelope, and with a familiar credit profile.

The daily liquidity profile aligns with the expectations of an on-chain holder. Money-market funds typically offer same-day or next-day subscription and redemption at a stable NAV or at an accrual-adjusted NAV; this matches the liquidity expectations of treasury and stablecoin operations more closely than, for example, a long-duration fixed-income or equity product would.

The regulatory wrapper is well-understood. Money-market funds operate under established regulatory frameworks — 2a-7 in the United States, the MMFR in Europe, equivalent local regulations in other major jurisdictions — and supervisors are familiar with the product. Tokenisation adds a share-class innovation rather than a novel product category, which reduces the supervisory learning curve.

The valuation model is tractable. A money-market fund has a well-defined NAV calculation at a known frequency, and the token's share price can be derived from the NAV without significant additional complexity. This contrasts with, for example, a private-credit fund where the NAV calculation is more subjective and less frequent.

The tokenised money-market products in the market today use several distinct structural patterns. The patterns illustrate the trade-offs available to an issuer.

The conventional-fund-with-tokenised-share-class pattern is the one BlackRock uses for BUIDL. The underlying fund is a conventional regulated money-market or cash-equivalent fund; the tokenised share class is a distinct class of units in the same fund, distributed to a specific investor set (institutional only in BUIDL's case) and issued in tokenised form on a supported ledger. The fund administration, the portfolio management, the valuation and the regulatory reporting run on the conventional infrastructure; the tokenisation is a distribution-layer and custody-layer change.

The on-chain-native fund pattern, used by Franklin Templeton for BENJI, runs the register of holders directly on-chain with the blockchain record acting as the primary system of record for the fund's holdings. This is a more substantial operational change: the transfer agent function shifts onto the ledger, the reconciliation runs the opposite direction (off-chain records reflect on-chain state rather than the reverse), and the fund administration integrates with the blockchain directly. The benefit is tighter operational integration between the share register and the underlying fund operation.

The treasury-token pattern, used by Ondo for OUSG and by several similar products, is structurally a single-issuer note (or similar instrument) backed by a portfolio of short-duration treasuries held in a feeder fund at a regulated custodian. The token is not a direct fund unit but a senior obligation of the issuer collateralised by the treasury portfolio; the economic profile mirrors a money-market fund while the legal form is different. The pattern is useful where the issuer wants faster product iteration than the conventional fund-registration process allows.

Each pattern has live institutional flow. The choice depends on the issuer's existing product infrastructure, the distribution strategy and the target investor set.

The infrastructure for a tokenised money-market programme is a specialisation of the general tokenised-securities infrastructure stack, with a few product-specific components.

Ledger selection. Most institutional tokenised money-market products are live on Ethereum with additional deployments on several alternative chains (Solana, Stellar, Avalanche, Polygon) for specific distribution reach. Ethereum remains the default for institutional distribution because of custody maturity, compliance-tooling maturity, and counterparty ubiquity. Additional chains extend reach; they rarely replace the primary deployment.

Token standard. ERC-3643 or equivalent permissioned-transfer standards are the norm for the institutional share-class products, because the investor base is restricted to qualified institutions and the transfer restrictions must be enforced at the protocol level. Token-2022 on Solana provides the same capability for the programmes with a Solana deployment; our Solana page covers the specifics.

NAV mechanism. The token either rebases daily (the token quantity adjusts to reflect the accrual, keeping the token price at a notional unit value) or pays the accrual through a distribution flow (the token price rises with accrual, or the accrual is distributed to a separate reward token). The rebase model is operationally cleaner for some holders; the distribution model is cleaner for others. The choice influences how holders integrate the token into their own accounting.

Subscription and redemption. The primary-market flow runs through the conventional fund subscription and redemption mechanism for the underlying fund, with a tokenisation step (mint on subscription, burn on redemption) added at the share-class level. The token is minted to the investor's address after the fund administrator confirms receipt of the subscription proceeds; redemption runs in reverse. Daily cut-off mechanics apply, as they do for the conventional share class.

Settlement. Primary settlement runs against the issuer's operating account and is handled through conventional bank flows plus the tokenisation step. Secondary settlement — where the product is traded between qualified holders — runs on an RFQ or bilateral basis with DvP against a stablecoin or tokenised-deposit cash leg. Our settlement infrastructure page covers the cash-leg options; the operational pattern is the same as for the other institutional tokenised-securities products discussed in the tokenisation pillar.

Custody. Institutional custody of the tokens is provided either by the fund's appointed custodian (which extends its product to tokenised assets) or by a specialist digital-asset custodian contracted for the purpose. Either path is operationally workable; the choice is driven by the investor base's existing custody relationships. Bridge's custody product for asset managers supports both patterns.

For the holders of tokenised money-market products — corporate treasuries, bank treasuries, exchange and stablecoin-issuer treasuries — the product changes several elements of the treasury operating model.

Intraday cash management. A tokenised money-market token held on a ledger that supports DvP can be used as the collateral or cash leg in an intraday tokenised-securities trade without requiring a separate cash-management step. A treasury that holds its short-duration cash-equivalent position in tokenised form can, in principle, settle trades directly against that position rather than moving cash through the conventional payment rail first. This is a small efficiency gain on any single transaction and a meaningful one in aggregate for a high-volume operation.

Reserve transparency. Several tokenised money-market products publish their holdings in near-real-time on-chain or through a reconciled feed. For the holder this provides a continuous view of reserve composition that the conventional monthly or weekly reporting cycle does not. The transparency is particularly relevant for stablecoin issuers and for crypto-exchange operators who face continuing scrutiny of their reserve management.

Accounting treatment. Tokenised money-market units held on-chain are classified by most accounting frameworks as investments in a money-market fund, not as cryptocurrency. The classification is specific to the product and the jurisdiction and should be confirmed with the relevant auditor, but the baseline treatment is the same as the conventional equivalent. The tokenisation is a custody mechanism, not a product reclassification.

Yield capture. Unlike the stablecoin balance that the tokenised money-market product often replaces, the tokenised fund pays the underlying yield (net of fund fees) to the holder. For a sizeable treasury position the yield differential is material, and the operational simplicity of holding a yield-bearing cash-equivalent on the same ledger where settlement operations run is a significant improvement.

The regulatory envelope for tokenised money-market products is settled in most major jurisdictions, but a few product-specific considerations apply.

Distribution scope. Each product is distributed under a specific exemption or registration in each target jurisdiction. Institutional-only distribution under the United States Reg D, Reg S, or equivalent exemptions is the most common; retail-accessible distribution requires full prospectus registration in most jurisdictions and is rarer.

Transfer restrictions. The token must enforce the distribution-eligibility rules at the transfer point, which the protocol-level enforcement patterns discussed in the securities infrastructure piece are designed for.

Travel Rule. For transfers at or above the applicable threshold, the originator and beneficiary data exchange must complete before the token moves. Our Travel Rule platform covers this operationally.

Supervisory reporting. The underlying fund's supervisory reporting — portfolio holdings, risk metrics, stress-test results — runs as normal. The tokenisation adds a holdings feed and a transaction feed that the supervisor may request access to directly.

Pakistan's framework. Under the Virtual Assets Act 2026 and PVARA, tokenised fund units are treated as securities with virtual-asset characteristics. The PVARA licensing guide covers the licensing path for a custodian or a distribution-focused service provider; an issuer of a tokenised money-market product in Pakistan would typically rely on the existing AMC licensing regime for the fund itself and use PVARA-licensed service providers for the tokenisation and custody layer.

The tokenised money-market category is likely to continue growing faster than other RWA categories over the next twenty-four months. The drivers are the steady expansion of on-chain treasury demand, the continuing regulatory normalisation of the product structure, and the operational maturation of the custody and settlement layers. The category's growth is also the strongest evidence available that RWA tokenisation has moved past the speculative phase and into a normal product-development cycle.

For banks, asset managers and treasurers evaluating the category, the practical questions are the distribution reach they need, the custody relationships they want to use, and the integration with their existing treasury and operational infrastructure. Bridge's tokenisation platform supports tokenised fund issuance across the common ledger targets, the custody stack provides institutional custody for both issuers and holders, and the consulting team supports programme design and operational rollout. Contact us if you are scoping a tokenised money-market product, whether as an issuer or as an institutional holder; the conversations that move fastest start from the target investor set and the distribution envelope rather than from the ledger shortlist.