Goldman Sachs Pursues Round-the-Clock Trading of Tokenized Treasuries and Money Market Instruments in the US

Goldman Sachs is working to enable 24/7 trading of tokenized Treasuries and money market fund shares, as outlined by the head of digital assets, Mathew McDermott, at TOKEN2049 in Dubai.

This initiative is indicative of the firm’s broader goal to integrate traditional collateral with blockchain technology, responding to rising client interest in on-chain investment options.

Currently, Goldman Sachs operates a crypto derivatives desk and is set to unveil three tokenization initiatives in 2025. These projects include the tokenization of its first U.S. fund and the introduction of a euro-denominated digital bond.

Tokenized money market funds have reached over $1 billion in assets under management, with industry projections suggesting growth to $2 trillion by 2030. Early liquidity offerings from companies like BlackRock and Franklin Templeton, along with various Web3 firms, are creating avenues for tokenized collateral to facilitate continuous and flexible settlement processes.

Tokenized Treasuries have already exceeded $5 billion, with BlackRock’s BUIDL leading this new financial trend.

Recent policy changes have eliminated significant regulatory barriers. An Interpretive Letter from the Office of the Comptroller of the Currency, released in March, permits national banks to engage in crypto custody, stablecoin transactions, and settlements using distributed ledger technology without needing prior approval.

In a notable shift, the Federal Reserve, FDIC, and OCC have retracted earlier guidance from 2023 that dissuaded crypto-related activities. This alignment with global regulatory frameworks is part of broader deregulatory actions initiated during the Trump administration.

Goldman Sachs is also contemplating the possibility of transforming its Digital Asset Platform (GS DAP) into a standalone entity. This strategy aims to enable the platform to support multiple institutions, enhancing operational efficiency and liquidity—critical factors for secondary trading of tokenized Treasuries and similar assets.

Despite these advancements, challenges remain. Goldman prefers permissioned blockchains to ensure compliance, and bank custodians still deal with regulatory capital requirements associated with on-chain assets as per SEC rules. There is still limited liquidity in tokenized bonds, indicating that secondary markets will take time to develop fully.

The bank’s strategic roadmap involves launching tokenized government debt products that can be traded beyond traditional market hours, aiming to adapt to changing institutional needs while integrating blockchain technologies with existing market operations.