In a significant move, JP Morgan Chase & Co. has officially launched the My OnChain Net Yield Fund (MONY) on the Ethereum blockchain as of December 15. This initiative aims to attract the substantial institutional capital currently trapped in low-yield stablecoins and early tokenized funds.
MONY effectively combines traditional money-market fund structures with the advantages of blockchain technology, offering a yield that payment stablecoins like Tether and Circle cannot legally provide under the new US regulations. This strategy positions MONY as a redefinition of “cash on-chain,” geared towards large, KYC-verified pools of capital.
The launch places JP Morgan in direct competition with BlackRock”s BUIDL and the expanding tokenized Treasuries market, which has seen substantial growth as institutions seek yield-bearing, blockchain-native cash equivalents.
The timing of this launch correlates with the recent passing of the GENIUS Act, a US stablecoin law that established a licensing framework for payment stablecoins, while prohibiting issuers from providing interest to token holders. This regulatory shift has created a structural opportunity cost for corporate treasurers and crypto funds holding significant stablecoin balances, costing them approximately 4-5% per year on idle assets.
Unlike payment stablecoins, MONY is structured as a Rule 506(c) private placement money-market fund, classifying it as a security available only to accredited investors. This structure allows for investment in US Treasuries and fully collateralized Treasury repos, enabling the fund to distribute most of its income back to shareholders.
According to Asva Capital, MONY”s design facilitates a two-step workflow for investors, allowing them to transact using USDC or other payment tokens and subsequently transition into MONY for yield generation.
With an initial capital injection of approximately $100 million from its own reserves, JP Morgan is actively marketing MONY to its global liquidity client base. John Donohue, the head of Global Liquidity at JP Morgan Asset Management, anticipates that other major banks will emulate this model.
The choice of Ethereum as the foundational blockchain for MONY signifies a pivotal recognition of the convergence of liquidity, tools, and counterparties on public chains. Thomas Lee from BitMine remarked that “Ethereum is the future of finance,” underscoring the importance of this decision.
However, it is essential to note that MONY operates as a 506(c) security, meaning its tokens are restricted to allowlisted, KYC-compliant wallets, ensuring compliance with securities laws.
The implications of this move extend beyond JP Morgan itself. The bank”s entry into the tokenized money-market fund sector reflects a broader trend among traditional financial institutions, including BlackRock, Goldman Sachs, and BNY Mellon, who are all venturing into tokenized cash-equivalent products. This shift signals a transition from early experimentation to fierce competition over institutional ownership of digital cash on public chains.
Ultimately, MONY represents not just an innovative financial product but also a strategic maneuver by JP Morgan to reclaim some of the liquidity that has moved outside traditional banking systems, aiming to convert it into a competitive edge within the evolving landscape of digital finance.
