Federated Hermes announced it will offer two UCITS Money Market Funds (MMFs) in tokenized form with Archax, a UK Financial Conduct Authority (FCA)-regulated digital securities exchange, broker and custodian. This is Federated Hermes’ first non-US digital assets initiative.
Federated Hermes Short-Term Sterling Prime Fund and Federated Hermes Short-Term US Prime Fund are listed on the Archax platform, allowing professional investors to hold them through beneficial ownership tokens. Issued by Archax, these tokens represent investors’ holdings in the underlying UCITS funds, and are available on multiple blockchains, including Ethereum, Polygon, Algorand, Hedera, Etherlink, XRPL (Ripple), Arbitrum, Solana, Stellar and XDC.
With over five decades of experience and $634.4 billion1 in money market assets under management, Federated Hermes has been actively engaging with leading innovators and financial institutions in the digital assets arena. In the US, the firm serves as subadvisor to a private tokenized fund. In addition, Federated Hermes recently participated in a collaborative initiative with BNY and Goldman Sachs, exploring the use of blockchain technology to record customer ownership of select money market funds.
Deborah Cunningham, chief investment officer for Global Liquidity Markets, said in a statement: “Delivering innovative cash management solutions has long been central to how we serve our clients. As one of the world’s longest-standing money market managers, we are excited to bring tokenized money market funds as an alternative to investors already holding assets on blockchains. This provides the potential to access the stability and yield characteristics typically associated with money market funds, without needing to move assets off-chain.
“Tokenized products represent a new and evolving way to engage with clients, combining our investment expertise with Archax’s digital infrastructure to meet the needs of those active in digital finance.”
Graham Rodford, CEO and co-founder of Archax, said in a statement: “Unlocking new demand for TradFi products through the use of blockchain and tokenization is a key strand of the Archax strategy around real-world assets. This partnership does just that, but also unlocks innovative new use-cases for money market funds once tokenized, such as the ability to use them as collateral and transfer value between parties, as a type of yield-bearing, digital ‘currency’. Working with Federated Hermes is a clear demonstration of the effectiveness of combining Archax’s regulated and institutional approach to digital assets with an established, leading player from the traditional world.”