JPMorgan Chase has submitted an application to the U.S. Securities and Exchange Commission (SEC) for its second tokenized money market fund, aiming to launch it on the Ethereum blockchain. The fund, designed to serve as a reserve asset for stablecoin issuers, will be known as the JPMorgan OnChain Liquidity-Token Money Market Fund (JLTXX). If approved, it will further solidify JPMorgan’s push into the digital assets arena.
Structure and objectives of the JLTXX fund
Trading under the ticker JLTXX, the proposed money market fund will invest in highly liquid assets such as U.S. Treasury securities and repurchase agreements backed by them. The application does not provide a specific timeline for the fund’s launch or when it will accept investors. JPMorgan stated that its digital asset unit, Kinexys Digital Assets, will operate the blockchain infrastructure for the fund. Currently, Ethereum is the only supported blockchain, but JPMorgan intends to expand to additional platforms in the future.
As one of the largest banks in the U.S. financial sector, JPMorgan has made technological innovation a priority. In recent years, the firm has accelerated its initiatives in digital assets, blockchain, and tokenization.
Compliance with stablecoin regulations
JPMorgan’s latest filing is shaped by the GENIUS Act, which is under deliberation in the U.S. and focuses on establishing reserve requirements for stablecoins. This proposed legislation would require stablecoins to be fully backed by cash, treasuries, or secured bank deposits, to ensure their safety. The fund’s application underscored this regulatory alignment:
“The fund aims to invest in a manner that satisfies the reserve requirements applicable to stablecoin issuers.”
This structure positions JLTXX less as a traditional publicly available investment product and more as a specialized compliance tool for stablecoin issuers. Notably, Morgan Stanley made a similar filing last month, but their fund did not feature blockchain infrastructure.
Rising competition in the tokenization sector
JLTXX marks JPMorgan’s second attempt at a tokenized money market fund on Ethereum. Last year, the bank launched the MONY fund, targeting institutional clients seeking on-chain cash management. While that product prioritized institutional investors, the new JLTXX fund is geared toward businesses focused on stablecoin issuance. Competition is increasing in the sector, with Franklin Templeton’s tokenized fund BENJI also gaining traction. As of May 12, the tokenized real-world asset market reached $32.2 billion, nearly $15.9 billion of which was allocated to U.S. Treasury-based products.
Fund costs and risk factors outlined
Application documents indicate that the fund’s Token Class shares will carry a total annual operating expense of 0.71%. However, JPMorgan and its affiliates have committed to capping net expenses at 0.16% until June 30, 2028, by covering the difference themselves. For a $10,000 investment, the first-year expense would be $16, rising to a cumulative $113 after three years. The product will be structured under the Investment Company Act of 1940 and the Securities Act of 1933.
Investors are cautioned about potential interest, credit, and novel blockchain-related risks associated with the product. The filing also introduces two new risk factors: ‘blockchain technology risk’ and ‘stablecoin issuer operational risk,’ emphasizing the unique dynamics of crypto and blockchain within the fund.
