A 242-year-old bank says asset managers are rushing into tokenized funds despite limited fundamental demand for blockchain-based assets.
Bank of New York Mellon has cautioned that Wall Street’s push into tokenized funds reflects fear of missing out rather than strong market fundamentals. The trend involves converting real-world assets like cash, Treasury bills, and repurchase agreements into digital tokens using blockchain technology.
BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) holds $2.35 billion in assets, while Franklin Templeton’s OnChain U.S. Government Money Fund (BENJI) manages $831.78 million. Other major firms have launched similar products, but adoption may be driven by hype rather than demand.
BNY’s global head of ETFs, Ben Slavin, highlighted the FOMO dynamic in recent comments, suggesting the trend lacks a clear long-term rationale beyond competitive pressure.