Standard Chartered-custodied AlloyX launches tokenized fund on Polygon

Tokenization infrastructure company AlloyX has launched a tokenized money market fund on Polygon, designed to combine bank-custodied assets with DeFi-native strategies — a move that highlights the accelerating growth of real-world assets (RWAs) on the blockchain.

The fund, called the Real Yield Token (RYT), represents shares in a traditional money market fund whose underlying assets are held in custody by Standard Chartered Bank in Hong Kong and subject to regulatory compliance and audits, the company announced.

Like a conventional money market fund, RYT invests in short-term, low-risk instruments such as US Treasurys and commercial paper. Tokenization makes these shares tradable onchain, allowing holders to use them within decentralized finance ecosystems.

Notably, RYT can be used as collateral across DeFi protocols — enabling users to borrow against their holdings and reinvest proceeds to boost yields, a strategy known in DeFi as looping.

The product is deployed on Polygon, an Ethereum scaling network, chosen for its low fees, fast transactions, and robust DeFi ecosystem.

Source: Sandeep NailwalAlloyX’s launch comes amid a surge in tokenized money market funds as institutions explore blockchain-based cash management. Among the most prominent is BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL), which offers institutional investors tokenized exposure to US dollar yields through Treasury bills and repurchase agreements.

Goldman Sachs and BNY Mellon have also announced plans for tokenized MMFs offering 24/7 settlement, though these products generally lack DeFi-native functionality such as looping and composability across decentralized protocols — a key differentiator for RYT.

Related: Alternative assets are no longer alternative

Demand for tokenized money market funds is on the rise

Money market funds have become a prime focus for tokenization, as asset managers look to bridge traditional finance with digital markets and offer investors onchain access to familiar instruments.

The tokenized Treasury market has reached $8 billion in value, with an average yield to maturity of 3.93% as of Oct. 2. Source: RWA.xyzIn a June report, Moody’s described tokenized short-term liquidity funds as “a small but rapidly growing product,” noting a sharp increase in offerings since 2021. At the time, the credit rating agency estimated the tokenized money market fund market at $5.7 billion.

In the United States, tokenized money market funds are gaining traction as a way to maintain the appeal of cash-like assets, especially amid the passage of the GENIUS Act and rising stablecoin adoption.

“Instead of posting cash, or posting Treasurys, you can post money-market shares and not lose interest along the way. It speaks to the versatility of money funds,” JPMorgan strategist Teresa Ho told Bloomberg in an interview

Magazine: Hong Kong isn’t the loophole Chinese crypto firms think it is

• #Business
• #Banks
• #DeFi
• #Polygon Add reaction