Tokenized Fund Competition Intensifies: How JPMorgan and BlackRock Are Battling for the Next Generation of Financial Infrastructure

In the second week of May 2026, Wall Street made two major moves in rapid succession.

On May 7, BlackRock, the world’s largest asset manager, filed an application with the U.S. Securities and Exchange Commission (SEC) to add an on-chain digital share class to its existing traditional money market fund, the "BlackRock USD Treasury Benchmark Liquidity Fund" (BSTBL). Simultaneously, it also applied to launch a brand-new on-chain stablecoin reserve fund. The existing fund manages approximately $6.1 billion in assets. Less than a week later, JPMorgan Chase filed its own application, announcing the launch of its second tokenized money market fund on Ethereum—the JPMorgan On-Chain Liquidity Token Money Market Fund (JLTXX).

These two applications, submitted just days apart, share a highly similar goal: to provide stablecoin issuers with on-chain reserve assets that meet regulatory standards. This is no coincidence. Following the GENIUS Act’s establishment of a compliance framework for the U.S. stablecoin market, Wall Street’s competitive logic has shifted from "Should we do this?" to "Who can do it faster, more compliantly, and at greater scale?" Behind this race, a deeper question is emerging: The power to define the next generation of financial infrastructure is being rewritten.

Two Major Moves in Five Days

On May 7, 2026, BlackRock submitted two filings to the SEC. One sought to establish an on-chain digital share class for its existing traditional money market fund, the BlackRock USD Treasury Benchmark Liquidity Fund, which currently manages about $6.1 billion in assets. The plan is to record these shares on Ethereum using the ERC-20 token standard. The other filing proposed the creation of a new "BlackRock Daily Reinvestment Stablecoin Reserve Instrument," designed as a native tokenized money market fund for stablecoin issuers and on-chain investors, with multi-chain support and a minimum subscription threshold of $3 million.

On May 12, 2026, JPMorgan filed an application to launch its second tokenized money market fund, JLTXX, on Ethereum. This fund will invest over 99.5% of its assets in short-term U.S. Treasuries and Treasury-backed overnight repurchase agreements. Operated by JPMorgan’s digital asset arm, Kinexys Digital Assets, the fund has a minimum investment threshold of $1 million.

The close timing and near-identical product positioning of these applications signal that Wall Street’s tokenization race has moved directly from strategic planning into a full-blown battle for market share.

How the GENIUS Act Is Reshaping the Playing Field

To understand the essence of this competition, we need to revisit a pivotal moment: On July 18, 2025, U.S. President Trump signed the "Guiding and Establishing the Nation’s Innovation in U.S. Stablecoins Act"—known in the industry as the GENIUS Act. One of the Act’s core provisions requires stablecoin issuers to maintain qualified reserve assets equal to every dollar of stablecoin issued. The Act explicitly defines qualified reserve assets: Federal Reserve account balances, insured deposits, U.S. Treasuries maturing in no more than 93 days, Treasury-collateralized overnight repos, and shares of government money market funds that invest solely in the above assets.

While this rule seems straightforward, it has created an entirely new demand market. Once the Act took effect, all stablecoin issuers operating in the U.S. were legally required—not merely encouraged—to construct compliant reserve portfolios within a set timeframe.

Previously, stablecoin issuers primarily managed reserves through traditional banking channels. However, the passage of the GENIUS Act raised a new question: Since stablecoins themselves are on-chain assets, why shouldn’t their reserves also "go on-chain"?

Wall Street seized on this logic. The core design goal of BlackRock and JPMorgan’s tokenized funds is to provide stablecoin issuers with a "native on-chain, regulatory-compliant, yield-generating" reserve tool. In many ways, the GENIUS Act was the spark that ignited this race.

Looking at the broader historical context, the following milestones form the timeline of this competition:

This timeline clearly illustrates a trend: As regulatory frameworks become more defined, traditional financial institutions are accelerating their on-chain initiatives at an unprecedented pace.

Market Size, Products, and Competitive Positioning

Market Size and Growth Trends

According to RWA.xyz, as of May 12, 2026, the total market size of tokenized real-world assets (RWAs) had surpassed $32.2 billion. The tokenized U.S. Treasury market alone reached $15.2 billion in early May, growing by $1.06 billion in just the past 30 days. The entire RWA market has expanded by over 200% in the past year.

Ethereum dominates as the primary platform for tokenized assets, holding more than 53% market share and supporting over 800 tokenization projects.

Comparison of Major Competitor Products

Since its launch, BlackRock BUIDL has become the largest single tokenized Treasury product, deployed across Ethereum, Aptos, Arbitrum, Avalanche, Optimism, and Polygon, with BNY Mellon as custodian and Securitize handling issuance and compliance. Its latest architecture further integrates on-chain shares with regulated transfer systems, creating a closed loop between blockchain records and traditional shareholder registries.

JPMorgan’s MONY, launched at the end of 2025, is much smaller than BUIDL. According to rwa.xyz, MONY manages about $100 million in assets, while BUIDL has reached approximately $2.6 billion. JLTXX, however, is more precisely targeted—specifically naming stablecoin issuers as its core clientele and introducing USDC-to-USD conversion integration in its documentation.

From a scale perspective, BlackRock currently holds a clear first-mover advantage. Yet JLTXX’s design reveals JPMorgan’s differentiated strategy: rather than competing head-on for size, it is betting that the GENIUS Act will create massive compliant reserve demand among stablecoin issuers, and is aiming to set the standard in this emerging niche.

JLTXX employs a "whitelist + off-chain official record priority" model, reflecting JPMorgan’s cautious approach to compliance risk. The documentation clearly states that in the event of discrepancies between on-chain and off-chain records, the off-chain record will prevail. This ensures regulatory compliance but also distinguishes the product fundamentally from the "decentralized finance" narrative.

Dissecting Market Sentiment: Three Perspectives, Three Narratives

The tokenized fund race has sparked at least three distinct schools of thought in the market.

Narrative One: This is the inevitable result of stablecoin regulation—a "compliance dividend" realized. Proponents argue that the GENIUS Act created a mandatory demand pool for reserve asset management, and that traditional financial institutions have natural advantages in brand, compliance, and custody. Entering this market is simply rational business. BlackRock currently manages about $65 billion in stablecoin reserves for Circle. Migrating reserve management from traditional channels to on-chain is fundamentally an efficiency upgrade, not a radical business transformation. In this view, the race is "predictable, linear, and moderate."

Narrative Two: This is Wall Street’s "land grab" for on-chain financial infrastructure. Analysts supporting this perspective argue that tokenized funds are not just products—they are nodes in the financial infrastructure. When JPMorgan positions JLTXX as the future clearing and reserve standard for stablecoins issued by global systemically important banks, it is seeking not just market share, but the power to define the rules. From this angle, the ultimate goal is not to sell more fund shares, but to secure a central position in the next generation of financial rails.

Narrative Three: This is a "structural absorption" of the crypto industry by traditional finance. Observers with this view note that while Wall Street’s tokenized products use blockchain technology, their governance is entirely centralized—whitelist controls, off-chain final records, institutional access thresholds. The proliferation of these products could squeeze out crypto-native RWA projects, ultimately bringing on-chain finance under traditional regulatory and governance frameworks. This narrative carries a note of caution, but is not without logic.

These three narratives are not mutually exclusive; rather, they describe different facets of the same process. In reality, the current tokenized fund race encompasses all three attributes: "compliance dividend realization," "infrastructure land grab," and "structural absorption." Each is valid and advancing simultaneously.

Industry Impact Analysis: The Changing Logic of Financial Infrastructure

The impact of the tokenized money market fund race goes far beyond product innovation. It is fundamentally changing the logic of financial infrastructure in three key ways.

First, the on-chain migration of U.S. dollar liquidity is accelerating. Traditional money market funds are among the most critical liquidity management tools in the U.S. financial system. Tokenizing these funds on blockchains enables the issuance, transfer, and settlement of dollar reserve assets to operate independently of the traditional interbank clearing system. Geoff Kendrick, Global Head of Digital Asset Research at Standard Chartered, notes, "As banks and other institutions build products in the blockchain space, almost all activity will take place on Ethereum in the coming years." If this holds true, the on-chain dollar system will evolve from today’s "stablecoin payment layer" to a "blockchain-based reserve asset layer," forming a more complete and self-sustaining financial ecosystem.

Second, traditional asset managers are expanding their roles from "asset managers" to "financial infrastructure operators." Whether through BlackRock’s Securitize partnership or JPMorgan’s Kinexys platform, these institutions are no longer content with simply managing underlying asset portfolios. They are extending into the operational layer of on-chain infrastructure—token issuance, transfer registration, on-chain compliance verification—functions traditionally handled by independent custodians, transfer agents, and central securities depositories. If this role expansion reaches scale, it could reshape the value chain of financial intermediation.

Third, the regulatory framework is shifting from "following innovation" to "leading innovation." The pace of regulatory developments in 2026 is unprecedented: In March, the SEC and CFTC jointly issued a 68-page interpretive guidance classifying crypto assets; that same month, the OCC, Federal Reserve, and FDIC confirmed that tokenized securities receive equal capital treatment as traditional securities; and the GENIUS Act established a clear compliance framework for stablecoins. The combined effect of these actions is that traditional financial institutions now have unprecedented legal certainty for on-chain deployment, clearing the way for large-scale entry.

Conclusion

On the surface, the tokenized fund applications by JPMorgan and BlackRock are a product competition. In reality, they are a battle for the right to define the future of financial infrastructure.

With about $2.6 billion in BUIDL assets under management, BlackRock has established a clear first-mover advantage in tokenized Treasuries and, through its long-term partnership with Securitize, has built a standardized "issuance + custody + on-chain verification" architecture. JPMorgan, meanwhile, is using JLTXX to carve out a differentiated moat of bank-level trust in the GENIUS Act-compliant reserve asset space. Their competitive strategies differ, but both are likely headed toward the same destination: a new on-chain financial order led by traditional financial institutions, built on compliant public blockchains, and deeply integrated with existing regulatory systems.

For industry participants, the key is not who sells more fund shares in the short term, but which assumptions this race is turning into reality—tokenization moving from narrative to policy, from experiment to scale, from crypto-native ecosystems into the core of traditional finance. When financial giants begin describing blockchain as the infrastructure for fund issuance and record-keeping in official documents—rather than just an experimental technology—the generational shift in the financial system may already be quietly underway.

It is important to remain clear-eyed: This process is still in its very early stages. The $15.2 billion tokenized Treasury market is a mere trickle compared to the more than $6 trillion global money market fund industry. But the direction of that trickle may well signal the course of the next generation of financial infrastructure.