Northern Trust Asset Management has launched a tokenized share class for the NIF Treasury Instruments Portfolio to mark its entry into the digital asset market, according to the company.
This structure uses distributed ledger technology to maintain a digital mirror of equity ownership, while the underlying portfolio continues to invest in short-term U.S. Treasury securities.
According to Monday’s announcement, the shares will initially be offered through BNY’s LiquidityDirect platform, which operates on Goldman Sachs’ digital assets platform. The Fund itself does not use blockchain technology or invest in crypto assets. Instead, authorized intermediaries are expected to maintain blockchain-based mirrors of their clients’ ownership records.
The NIF Treasury Instruments Portfolio invests in a diversified pool of short-term U.S. Treasury securities and seeks to maintain value of $1.00 per share, but is not FDIC insured and may lose value.
Northern Trust Asset Management is the asset management arm of Northern Trust Corporation, and as of Dec. 31, it said it managed approximately $1.4 trillion in assets, including $355 billion in liquidity strategies.
The company said the launch marks Northern Trust Asset Management’s entry into the digital asset market.
Tokenized money market funds use blockchain technology to represent traditional money market portfolios, giving investors on-chain access to short-term, high-yield assets such as U.S. Treasuries.
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Tokenized government bond funds expand
Tokenized money market funds have become one of the most important applications of blockchain technology in traditional finance. These funds aim to streamline payments and transfers by using blockchain-based ownership records.
According to data from RWA.xyz, approximately $11 billion of U.S. Treasury debt is currently represented on public blockchains, making it the largest category of tokenized real-world assets.
Some of the world’s largest asset managers dominate this sector. BlackRock’s USD Institutional Digital Liquidity Fund has approximately $2.2 billion of tokenized U.S. Treasury exposure, followed by Franklin Templeton’s On-Chain U.S. Government Money Fund with just over $920 million.
Tokenized US Treasuries. sauce: RWA.xyz
Other companies are expanding their structures even further. On February 24, WisdomTree introduced 24/7 trading and instant settlement for the WisdomTree Financial Money Market Digital Fund (WTGXX), enabling 24-hour secondary trading of tokenized mutual funds registered under the Investment Company Act of 1940.
As the sector expands, central banking institutions are investigating potential risks. The Bank for International Settlements warned in November that tokenized money market funds could pose operational and liquidity vulnerabilities if redemptions accelerate or on-chain liquidity declines.
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