Tokenised money market funds: what are the implications for financial stability?

Tokenization of money market funds (MMFs) is booming, hitting $7 billion in the US by June 2025. This phenomenon creates new bridges between traditional finance and cryptoassets and could heighten contagion risks to traditional financial markets and pose threats to financial stability. To address these risks, efforts are underway to assess whether existing regulatory frameworks adequately accommodate the characteristics of tokenized financial assets.