The Investment Company Institute published its latest weekly "Money Market Fund Assets" report Thursday, which shows money market mutual fund assets rising for the 8th straight week to $6.121 trillion, breaking above their previous April 3 record of $6.111 trillion. MMF assets are up by $234 billion, or 4.9%, year-to-date in 2024 (through 6/12/24), with Institutional MMFs up $75 billion, or 2.5% and Retail MMFs up $159 billion, or 9.5%. Over the past 52 weeks, money funds have risen by $669 billion, or 12.3%, with Retail MMFs rising by $462 billion (23.2%) and Inst MMFs rising by $207 billion (6.0%). (Note: Thank you to those attending our Money Fund Symposium this week in Pittsburgh! We hope you had a great conference and visit.... Attendees and Crane Data subscribers may access the conference binder and materials via our "Money Fund Symposium 2024 Download Center.")
The weekly release says, "Total money market fund assets increased by $28.02 billion to $6.12 trillion for the week ended Wednesday, June 12, the Investment Company Institute reported.... Among taxable money market funds, government funds increased by $25.14 billion and prime funds increased by $4.92 billion. Tax-exempt money market funds decreased by $2.03 billion." ICI's stats show Institutional MMFs increasing $27.2 billion and Retail MMFs rising $0.8 billion in the latest week. Total Government MMF assets, including Treasury funds, were $4.946 trillion (80.8% of all money funds), while Total Prime MMFs were $1.046 trillion (17.1%). Tax Exempt MMFs totaled $128.7 billion (2.1%).
ICI explains, "Assets of retail money market funds increased by $843 million to $2.45 trillion. Among retail funds, government money market fund assets increased by $29 million to $1.56 trillion, prime money market fund assets increased by $2.46 billion to $771.79 billion, and tax-exempt fund assets decreased by $1.65 billion to $117.02 billion." Retail assets account for over a third of total assets, or 40.0%, and Government Retail assets make up 63.7% of all Retail MMFs.
They add, "Assets of institutional money market funds increased by $27.18 billion to $3.67 trillion. Among institutional funds, government money market fund assets increased by $25.11 billion to $3.39 trillion, prime money market fund assets increased by $2.46 billion to $274.01 billion, and tax-exempt fund assets decreased by $385 million to $11.66 billion." Institutional assets accounted for 60.0% of all MMF assets, with Government Institutional assets making up 92.2% of all institutional MMF totals.
According to Crane Data's separate Money Fund Intelligence Daily series, money fund assets have risen by $31.6 billion in June (through 6/12) to $6.505 trillion. (They hit a record $6.538 trillion on 4/2, so our assets series has yet to reclaim record levels.) Assets rose by $91.4 billion in May, fell $15.8 billion in April and $68.8 billion in March. But they rose $72.1 billion in February, $93.9 billion in January, $32.7 billion in December and $226.4 billion in November. MMF totals fell by $31.9 billion in October. They rose $93.9 billion in September, $98.3 billion in August and $34.7 billion in July. Note that ICI's asset totals don't include a number of funds tracked by the SEC and Crane Data, so they're over $400 billion lower than Crane's asset series.
CoinDesk recently published an article titled, "Fidelity International Tokenizes Money Market Fund on JPMorgan's Blockchain." It says, "Fidelity International, a London-based funds management firm, has tokenized shares in a money market fund (MMF) using JPMorgan's Ethereum-based private blockchain network, Onyx Digital Assets. Tokenization occurred near instantaneously through connectivity between the fund's transfer agent (JPMorgan's transfer agency business) and Tokenized Collateral Network, an application that sits between a collateral receiver and a collateral provider on the bank's Onyx blockchain, said Fidelity International, which is a separate entity to U.S.-based Fidelity Management and Research."
The article explains, "Tokenization of traditional financial assets has become a priority for banks, and it's an area JPMorgan has been working on for some years. The essence of tokenization is to create on a blockchain a virtual investment vehicle representing real-world assets such as real estate, precious metals and collectibles. Stocks and bonds work too."
It tells us, "In October last year, JPMorgan carried out its first live blockchain-based collateral settlement transaction involving tokenized shares in a BlackRock money-market fund. The shares were transferred to Barclays for collateral in an over-the-counter derivatives trade. BlackRock has gone on to further embrace tokenization through its public-facing BUIDL project, with tokenization services firm Securitize."
Stephen Whyman of Fidelity International comments, "Tokenizing our money market fund shares to use as collateral is an important and natural first step in scaling our adoption of this technology. The benefits to our clients and the wider financial system are clear; in particular, the improved efficiency in delivering margin requirements and reduction in transaction costs and operational risk."
In related news, a press release titled, "Lift Dollar (USDL) from Paxos International is Now Available to Users in Argentina via Ripio, Buenbit, Manteca and Plus Crypto" tells us, "Paxos International, a UAE-based affiliate of Paxos, today announced Lift Dollar (USDL) -- a yield-bearing stablecoin issued under regulatory supervision -- is now available to consumers in Argentina via distribution partners Ripio, Buenbit, Manteca and Plus Crypto."
It adds, "USDL is unmatched in the market as holders earn overnight yield from short-term, minimal-risk US government securities and cash equivalent assets held under the safe protection and custody requirements of the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM). This reserve structure is like other Paxos-issued US dollar stablecoins that are backed 1:1. USDL is issued permissionlessly on Ethereum and pays yield programmatically on a daily basis to token holders."
The piece says, "USDL marks an important innovation in democratizing overnight yield by shifting interest earned on stablecoin reserve holdings directly to eligible end holders from the central issuer. This follows Paxos's proven history of building blockchain solutions for financial institutions and industry leaders."
It continues, "Using an Ethereum smart contract, USDL distributes the yield generated from its reserves to eligible wallet addresses daily without requiring any additional steps by the token holder. This results in a seamless experience for token holders as their USDL wallet holdings increase every day. Paxos will retain an issuer fee and pay out the remaining yield earned based on prevailing daily market conditions. Companies in permitted jurisdictions interested in enabling USDL on their platforms can onboard with Paxos International."
