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▲ On-chain, National Debt, Blockchain/AI Generated Image
With BlackRock and JPMorgan Chase putting tokenized national debt products at the forefront, targeting the stablecoin reserve market, Wall Street's on-chain finance competition is escalating into a full-blown battle for funds.
According to crypto media outlet Coingape on May 26 (local time), BlackRock and JPMorgan Chase are preparing tokenized national debt products that could replace some of the reserves of stablecoin issuers. On-chain analytics service Token Terminal reported that these traditional financial institutions are pursuing a structure that can replace some of the off-chain reserves currently used as stablecoin collateral with on-chain products.
This change gained momentum after the passage of the stablecoin regulatory act, GENIUS. The bill paved the way for stablecoin companies to hold tokenized money market funds as reserves, and traditional financial institutions entered a competition to secure market share in the on-chain national debt market. According to Token Terminal, the tokenized U.S. Treasury market is worth approximately $13.9 billion, with Ethereum (ETH) leading the market, accounting for over 50% of total activity. BNB Chain followed with over 20%.
BlackRock and JPMorgan Chase have submitted documents related to blockchain-based money market products. Both products share common structures, including cash accessibility, repurchase agreements, and short-term U.S. government securities. Additionally, each product is offered on Ethereum under the Investment Company Act of 1940 and is designed to restrict ownership access through a permissioned blockchain system.
BlackRock is focusing on applying blockchain records to its existing liquidity fund, valued at approximately $7 billion. The company plans to launch a digital security share class linked to a liquidity product focused on government bonds. BNY will serve as the previous agent, and the infrastructure will maintain an official ownership ledger. Investor identity information will be stored off-blockchain.
Coingape reported that the documents from BlackRock and JPMorgan Chase show that major financial institutions are taking different approaches amid the rise of tokenized financial products in the digital asset market. Institutions are exploring the possibility of utilizing public blockchain networks while adhering to regulatory requirements and maintaining limited investor access.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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