Korea's Financial Services Commission plans to tokenize institutional private MMFs by February 2027.
Korea's Financial Services Commission designated institutional private MMFs as the first tokenization phase, targeting professional investors.
Korea's Financial Services Commission will implement tokenized MMF regulations in February 2027 under revised token securities legislation.

Tokenized Money Market Funds (MMFs) use blockchain technology to issue and record MMF shares as digital tokens, with Korea's Financial Services Commission planning to tokenize institutional private MMFs by February 2027. Traditional MMFs invest in short-term instruments like government bonds, commercial paper, and certificates of deposit, with holdings managed via centralized systems; tokenized versions record ownership on distributed ledgers to streamline transfer and settlement processes. Financial institutions are adopting tokenized MMFs as liquidity management tools due to expanded collateral applications, following Franklin Templeton's 2021 launch of a blockchain-based MMF in the United States.

Franklin Templeton Launched Blockchain MMF in 2021

US asset manager Franklin Templeton introduced a blockchain-based money market fund in 2021. The product demonstrated the feasibility of recording fund ownership and transactions on distributed ledgers, serving as a precedent for subsequent institutional adoption.

Korea FSC Plans Institutional MMF Tokenization by February 2027

Korea's Financial Services Commission will implement tokenized MMF regulations in February 2027 under revised token securities legislation. The regulator designated institutional private MMFs as the first phase of tokenization, targeting professional investors before expanding to retail products. The initiative aims to enhance settlement efficiency and broaden collateral usage for domestic financial institutions.

FAQ

What is a tokenized money market fund?
A tokenized MMF is a money market fund whose shares are issued and recorded as digital tokens on a blockchain or distributed ledger, rather than through centralized systems. The fund invests in short-term instruments like government bonds, commercial paper, and certificates of deposit, with ownership transfers managed via blockchain technology.

When will Korea launch tokenized MMFs?
Korea's Financial Services Commission plans to tokenize institutional private MMFs by February 2027, coinciding with the implementation of revised token securities laws. The first phase will target institutional investors before potential expansion to other investor categories.

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