Wall Street bank, JPMorgan, has said stablecoins are likely to maintain their dominance over tokenized money market funds despite the latter offering yield, citing regulatory constraints that continue to limit broader adoption of tokenized funds within crypto markets.

In a report, JPMorgan estimated tokenized money market funds account for only about 5% of the overall stablecoin market. The bank said stablecoins remain the preferred instrument across

  • crypto trading,

  • collateral management,

  • payments, and

  • liquidity operations

because they function more seamlessly across centralized exchanges and decentralized finance protocols.

 

EXPERT OPINION | Stablecoins Could Be ‘The ChatGPT Moment of Crypto,’ Says Ripple CEO

 

The analysts, led by Nikolaos Panigirtzoglou, said tokenized money market funds face a ‘structural regulatory disadvantage’ because they are classified as securities, subjecting them to

  • registration,

  • disclosure, and

  • transfer restrictions

that do not apply to most stablecoins.

JPMorgan said that without major regulatory reforms, tokenized funds are unlikely to grow beyond 10% to 15% of the stablecoin market as a result.

 

“We doubt that tokenized money market funds would grow beyond 10%-15% or so of the stablecoin universe, unless there is a regulatory change that reduces the structural disadvantage arising from tokenized money market funds classified as securities,” the analysts said.

 

INSTITUTIONAL | JPMorgan to Launch a Tokenized Money Market Fund Supporting Stablecoin Issuers Under GENIUS Act

 

The report comes as large financial institutions intensify efforts to tokenize traditional assets such as Treasury bills and money market funds. In early May 2026, JPMorgan filed plans for an on-chain Treasury money market fund designed in part to serve as a reserve asset vehicle for stablecoin issuers under proposed U.S. legislation.

Asset managers, including BlackRock and Janus Henderson, have also expanded tokenized fund offerings with new infrastructure aimed at enabling near-instant redemptions into stablecoins.

 

INSTITUTIONAL | World’s Largest Asset Manager Deepening its Involvement into On-Chain Fund Offerings

The move comes as the market for tokenized real-world assets has grown sharply over the past year (~200% YoY) driven by increasing interest from traditional financial firms.… pic.twitter.com/ZkUvFBhwMj

— BitKE (@BitcoinKE) May 9, 2026

JPMorgan said tokenized money market funds are expected to still grow faster than stablecoins because of their yield-bearing nature, particularly among institutional investors seeking on-chain settlement combined with traditional investor protections. However, the bank warned that

  • regulatory uncertainty,

  • liquidity concerns, and

  • counterparty risks

continue to weigh on adoption and will not fundamentally change the balance between the two markets.

 

REGULATION | U.S Regulators Set a Precedent Saying Capital Treatment for Tokenized Securities is ‘Technology Neutral’

 

Analysts have described recent regulatory developments, such as:

  • a streamlined process for issuing on-chain money market funds, and

  • allowing institutional investors to use on-chain money market funds as off-exchange trading collateral

as only ‘marginal’ improvements that are unlikely to change the broader picture.

Stablecoins, by contrast, have increasingly become the core settlement layer of the crypto economy with their role expanding beyond trading into cross-border payments and treasury management.

Industry executives speaking at recent crypto conferences have described stablecoins as a key bridge between traditional finance and digital assets.

 

 

BITCOIN | America’s Largest Bank Says Bitcoin Dominance as Institutional Crypto Asset is Unlikey to Change

 

 

 

 

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