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What Is a Tokenized Money Market Fund and How Is It Different From a Stablecoin?
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A tokenized money market fund is a money market fund whose shares or fund interests are represented through blockchain-based records or tokens, giving holders exposure to a traditional fund structure that invests in short-term liquid assets like Treasury bills, repurchase agreements, and government securities. The critical distinction most people miss is that the token is not the full product — your legal rights flow from the fund documents, the official ownership record maintained by a transfer agent, and the redemption terms, not from holding the token itself. BlackRock's proposed OnChain Shares structure illustrates this clearly: Securitize Transfer Agent maintains the authoritative ownership record through a permissioned system, and the wallet token reflects that position rather than constituting it independently.Stablecoins and tokenized money market funds can both hold a $1.00 value and circulate on the same blockchain, which is where most confusion originates. The difference is in what that $1.00 represents.
A stablecoin is primarily a payment instrument — a token tied to fiat value used for settling transactions in the crypto ecosystem. A tokenized money market fund is a regulated fund security — a share in a fund that generates income and is subject to securities law, fund documents, investor eligibility requirements, and structured redemption processes. The ECB noted that TMMFs distribute yield and serve liquidity management purposes, while regulated stablecoins in the EU cannot pay interest at all and exist primarily as payment tools. One is a security with fund economics, the other is a payment instrument with a peg.
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Token not the product, fund documents are the product
