Wall Street is busy recently: money funds, intraday buybacks, commercial papers

# The Integration of Traditional Finance and Digital Assets: A Ongoing Structural Transformation  

By Bao Yilong  

Source: Wall Street News  

Today, the integration of traditional finance and digital assets is no longer a distant vision, but an ongoing structural transformation.  

According to news from Zhuifeng Trading Desk, the latest research from JPMorgan Chase on August 27 shows that Wall Street giants are tokenizing Real-World Assets (RWAs) at an unprecedented pace and integrating them into their core financial businesses.  

This is mainly reflected in three cutting-edge areas: money market funds tailored for stablecoins, blockchain-based intraday repo transactions, and fully digital commercial paper issuance.  

JPMorgan Chase believes these innovations are expected to improve transaction efficiency, reduce costs, and provide better liquidity management. However, the development of a regulatory framework still takes time, and the CLARITY Act is not expected to be formally passed until the beginning of 2026.  

## Stablecoin Reserve Funds: The Digital Transformation of Traditional Money Market Funds  

Traditional financial institutions are actively embracing the stablecoin market, viewing it as a key bridge connecting the digital and real worlds.  

The report points out that Bank of New York Mellon (BNY Mellon) is preparing to launch a money market fund focused on stablecoin reserves, becoming the third asset management giant to enter this field following BlackRock and Goldman Sachs.  

Last week, Goldman Sachs submitted an application for a stablecoin reserve fund, while BlackRock launched the Circle Reserve Fund as early as the end of 2022. Shares of this fund are intended to be held by stablecoin issuers as reserve support for their circulating payment stablecoins.  

According to documents filed with the U.S. Securities and Exchange Commission (SEC), this money market fund, named the "BNY Dreyfus Stablecoin Reserves Fund," is mainly targeted at stablecoin issuers and used as reserve assets for their stablecoins.  

Classified as a government money market fund, its investment targets are strictly limited to U.S. Treasury securities, Treasury repurchase agreements (repos), and cash.  

In the SEC filing, BNY Mellon stated, "Because the fund only intends to invest in certain eligible reserve assets as specified by stablecoin legislation, the fund’s yield may be lower than that of other money market funds permitted to invest in a broader range of investments and longer maturities."  

## Blockchain-Enabled Intraday Repos: 24/7 Trading Becomes a Reality  

Liquidity management is the core of financial markets. The report highlights two groundbreaking advances that use blockchain technology to revolutionize the repo market, aiming to meet liquidity needs outside regular market trading hours.  

The first case involves a standard repo transaction completed on the Canton Network (a public blockchain) via the Tradeweb platform—with the entire process taking place on a Saturday.  

In this transaction, U.S. Treasury securities held by a subsidiary of DTCC were tokenized, and these tokenized assets were used as collateral to borrow USDC (a stablecoin issued by Circle).  

The entire transaction was completed instantly on-chain, without the need for dealers as intermediaries, achieving real-time settlement that is unattainable in traditional markets. Multiple institutions including Bank of America and Citadel participated in the transaction, highlighting the great potential of this technology for cross-institutional collaboration.  

The second case comes from a collaboration between JPMorgan Chase, HQLAx, and Ownera.  

They launched a cross-ledger repo solution that allows traders to exchange assets between JPMorgan Chase’s cash ledger and HQLAx’s collateral ledger, with settlement and maturity times precise to the minute.  

This provides institutions with a new and efficient tool to optimize intraday liquidity, far exceeding the settlement efficiency of traditional repo transactions.  

## The Blockchain Revolution in Commercial Paper: End-to-End Digital Lifecycle  

The application of blockchain has penetrated into the core processes of traditional debt instruments.  

The report reveals that Oversea-Chinese Banking Corporation (OCBC) issued $100 million in U.S. commercial paper through JPMorgan Chase’s Digital Debt Service, becoming the first bank to issue commercial paper that uses blockchain throughout its entire lifecycle (issuance, settlement, servicing, and record-keeping).  

State Street Bank purchased all the paper and became the first third-party custodian to go live on the Digital Debt Service.  

By leveraging blockchain, these processes can become more efficient and transparent, while also bringing additional benefits such as faster settlement times.  

JPMorgan Chase points out that the intersection of digital assets and traditional finance is only the beginning. However, with the development of regulation in this field, large-scale adoption still takes time.  

The U.S. CLARITY Act is a new piece of legislation currently in progress, aiming to establish a comprehensive regulatory framework for all digital assets in the market and resolve ambiguities in market structure and jurisdiction between the SEC and the Chicago Mercantile Exchange (CME).  

The Act has passed the House of Representatives but not yet the Senate, and is expected to take longer to finalize. JPMorgan Chase predicts that the Act will not reach the U.S. President’s desk until the beginning of 2026.  

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