Stablecoins, Tokenization puts pressure on the money market funds: Bank of America
Bank of America’s (BAC) The rate strategy team said the US Treasury market is increasingly shaped by two emerging forces: Stablecoin’s demand for T-bills and the tokenization of assets related to government debt.
Bofa Views Stablecoins as less than a game-changer for wealth than Mutual Money Mutual Funds (MMFS)Where their potential higher yield represents a competitive challenge, Wall Street Bank said in a Monday report.
Bank analysts expect Stablecoin demand for Treasury bills to gradually grow, in accordance with $ 25 billion to $ 75 billion in the next 12 months, but not enough to mean transfer of dynamic market markets.
Stablecoins are cryptocurrencies that the value is tied to another owner, such as the US dollar or gold. They play a major role in cryptocurrency markets, giving other things a payment infrastructure, and are also used to transfer money around the world.
According to the Bofa, some MMF clients show an increase in interest in tokenization, viewing it as a defensive move against Stablecoins.
The report noted that in July, BNY Mellon (Bk)next to Goldman Sachs (GS), combined with blockchain -based technology To maintain the records of ownership of MMF’s selected shares.
The effort, spurred on the part of the Stablecoin Growth and the Genius Act, marked the first rollover of tokenized MMF shares.
Using stablecoins currently restricted from yield payment, money market funds see a narrow window to detect and offer competitive rates before regulatory changes or workarounds that explode the advantage, the report added.
Read more: Stablecoin supply to grow more $ 75B following the passage of the Genius Act, Bofa says
