JPMorgan’s asset management division is launching a new money market fund designed for stablecoin reserve allocation in line with U.S. regulatory requirements.
JPMorgan Asset Management registered the JPMorgan OnChain Liquidity-Token Money Market Fund, aimed at serving stablecoin issuers. The fund will operate using tokenized shares on the Ethereum blockchain. The new product received the ticker JLTXX and the status of a government money market fund.
The fund will invest exclusively in:
- U.S. Treasuries with maturities of up to 93 days;
- overnight repo;
- U.S. dollar cash holdings.
JPMorgan explicitly states that the product is intended for stablecoin issuers that need to hold reserves in highly liquid and regulated assets. According to the filing documents, the fund’s investment strategy is structured to comply with reserve asset requirements for stablecoin issuers under the GENIUS Act.
One of the fund’s key features is the use of JPMorgan’s Kinexys Digital Assets blockchain infrastructure. Fund shares will be tokenized and represented on Ethereum via smart contracts. However, legal ownership records will continue to be maintained through the bank’s traditional transfer agent registry.
The minimum investment amount will be $1 million. Annual investor expenses, after temporary fee waivers, are expected to be 0.16%. The fund will also maintain a stable net asset value of $1 per share.
JPMorgan additionally integrated the product with stablecoins through its Morgan Money service. At launch, the system supports Circle’s USDC stablecoin. Investors will be able to:
- convert USDC into U.S. dollars to purchase fund shares;
- receive payouts back in stablecoins;
- transfer tokenized fund shares between approved blockchain addresses.
The documents separately emphasize that the fund tokens aren’t stablecoins and that JPMorgan itself isn’t issuing payment stablecoins. Nevertheless, the bank expects stablecoin issuers to become the primary holders of the product.
Morgan Stanley’s investment division launched a similar fund just several weeks earlier.
