Stablecoins retain the edge over tokenized money market funds, JPMorgan confirms
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Tokenized money market funds still make up only around 5% of the stablecoin universe despite their ability to generate yield, Wall Street bank JPMorgan said in a Wednesday report.
Key facts
The team doubt that tokenized money market funds would grow beyond 10%-15% or so of the stablecoin universe, unless there is a regulatory change that reduces the structural disadvantage arising
By putting fund shares onchain, tokenized funds can enable near-instant settlement, 24/7 transfers, automated compliance and more efficient collateral management
These tokenized funds are likely to continue growing faster than stablecoins because of their interest-bearing nature, the analysts said, but it is unlikely they will expand beyond 10%-15%
Tokenized money market funds still make up only around 5% of the stablecoin universe despite their ability to generate yield, Wall Street bank JPMorgan said in a Wednesday report
Summary
JPMorgan said tokenized money market funds remain a small share of the stablecoin market because of regulatory hurdles. Stablecoins continue to dominate crypto trading, collateral and payments due to their seamless use across exchanges and DeFi. The bank expects tokenized money market funds to grow, but likely not beyond 10%-15% of the stablecoin market without regulatory changes. The bank said crypto market participants continue to favor stablecoins because they have become the ecosystem’s default cash instrument for trading, collateral management, settlement, cross-border payments and liquidity management across centralized exchanges (CEX) and decentralized finance (DeFi) protocols.