[1] Money market funds are mutual funds that typically hold safer, short-term securities including Treasurys, repo agreements or commercial paper. They are generally considered the most cash like of investments that still offer a yield.[2] Increasing Allocations in a Maturing Market (EY-Parthenon and Coinbase)[3] Structured as a sub-fund of the Franklin Templeton Investments VCC[4] Trading of money market funds typically happens only during market hours and often require up to two business days for settlement. In contrast, tokenised money market funds on a public blockchain enable investors to rebalance their portfolios at any time with settlement completing within minutes. In addition, pairing tokenised money market funds with stablecoins reduces the friction and delays associated with converting fiat into a token and vice versa.[5] A repo is a form of short-term borrowing that involves one party selling a security to another for cash, with the seller agreeing upfront to repurchase the same security from the buyer in the future at a higher price. In so doing, the seller is effectively borrowing cash from the buyer using the security as collateral, with the repurchase being a repayment of the loan and the higher price reflecting the interest. Investors tap repo markets for several reasons, including to access short term funding to meet liquidity requirements or to finance other transactions.
