Northern Trust Asset Management has launched the NIF Treasury Instruments Portfolio share class, marking its entry into the digital asset market, according to the company.
The structure uses distributed ledger technology to maintain a digital mirror of stock ownership, while the underlying portfolio continues to invest in short-term US Treasuries.
According to Monday’s announcement, the shares will initially be offered through BNY’s LiquidityDirect platform, which runs on Goldman Sachs’ digital asset platform. The fund itself does not use blockchain technology or invest in crypto assets. Instead, authorized intermediaries are expected to maintain a blockchain-based mirror of ownership records for clients.
The NIF Treasury Instruments Portfolio invests in a diversified pool of short-term U.S. Treasury instruments and seeks to maintain a value of $1.00 per share, although it is not FDIC-insured and may lose value.
Northern Trust Asset Management is the asset management arm of Northern Trust Corporation and managed approximately $1.4 trillion in assets as of Dec. 31, including $355 billion in liquidity strategies, according to the company.
According to the company, this marks the beginning of Northern Trust Asset Management’s entry into the digital asset market.
Tokenized money market funds use blockchain technology to represent traditional money market portfolios, giving investors on-chain access to short-term yielding assets such as US Treasurys.
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Tokenized Treasurys are expanding
Tokenized money market funds have become one of the most important applications of blockchain technology in traditional finance. Using blockchain-based ownership records, these funds aim to make settlement and transfers more efficient.
According to RWA.xyz, approximately $11 billion of US Treasuries are currently represented on government blockchains, making it the largest category of real-world tokenized assets.
Some of the world’s largest asset managers dominate the segment. BlackRock’s USD Digital Institutional Liquidity Fund holds about $2.2 billion in indexed Treasuries, followed by Franklin Templeton’s OnChain US Government Currency Fund with just over $920 million.
Other companies expanded the structure even further. On February 24, WisdomTree introduced 24/7 trading and instant settlement for the WisdomTree Digital Money Market Fund (WTGXX), which enables intraday trading of a mutual fund registered under the Investment Company Act of 1940.
As the sector expands, central banking institutions are scrutinizing potential risks. In November, the Bank for International Settlements warned that tokenized money market funds could face operational and liquidity vulnerabilities if payments accelerate or liquidity declines.
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