According to Deep Tide TechFlow news on August 21, a recent research report from Bank of America indicated that demand for stablecoins for U.S. Treasury securities is expected to grow by $25 billion to $75 billion over the next 12 months. However, this growth will not significantly change the dynamics of the Treasury market but will pose a greater competitive challenge to money market funds (MMF).
The report shows that some MMF clients are actively exploring tokenization as a defensive measure against competition from stablecoins. In July of this year, BNY Mellon and Goldman Sachs launched blockchain-based technology to record ownership of specific MMF shares, marking the first successful transfer of tokenized MMF shares.
Since stablecoins are currently restricted from paying yields, money market funds face a limited time window to complete tokenization and offer competitive yields in response to potential future regulatory changes or breakthroughs in the stablecoin industry.