BIS Highlights Rapid Growth and Risks in Tokenized Money Market Funds

The Bank for International Settlements reports that tokenized money market funds have surged from $770 million to nearly $9 billion by late 2025, presenting significant risks and opportunities.

These funds play a crucial role as collateral in crypto but face liquidity challenges, prompting innovations like Broadridge’s DLR system to address these structural vulnerabilities.

Tokenized Fund Assets Surge to $9 Billion

Total assets in tokenized money market funds have increased significantly, growing from $770 million to $9 billion recently, as reported by the Bank for International Settlements (BIS). This growth underscores the key role these funds play as collateral sources within the crypto ecosystem.

Tokenized funds, while offering flexibility akin to stablecoins, bring substantial risks, including operational and liquidity challenges. BIS identifies a liquidity mismatch in these funds, as daily redemption on-chain contrasts with the T+1 settlement of underlying assets, raising concerns during market stress.

“Tokenized money market funds have seen a significant surge, leading to concerns about underlying liquidity mismatches and operational risks.” – BIS Report

Regulatory and Market Reactions to Rapid Tokenization

Did you know? Tokenized money market funds have seen their assets skyrocket from $770 million to $9 billion in just two years, showcasing the rapid integration of traditional finance structures into digital asset ecosystems.

Data from CoinMarketCap shows that Ethereum (ETH) traded at $3,016.02, with a market cap of $364.02 billion as of November 27, 2025. ETH’s 24-hour trading volume decreased by 9.15% to $19.57 billion, reflecting a complex market environment influenced by fluctuating asset values.

Coincu’s research team suggests that ongoing tokenization and collaborations between crypto and traditional finance may reshape market dynamics. Regulatory focus on managing risks like those noted by BIS appears critical to fostering sustainable growth and innovation, as outlined in the objectives and governance of global securities regulation.