A screen displays the the company logo for Goldman Sachs on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., May 7, 2025.

Goldman Sachs and Bank of New York Mellon are set to announce that they've created the ability for institutional investors to purchase tokenized money market funds, CNBC has learned.

Clients of BNY, the world's largest custody bank, will be able to invest in money market funds whose ownership will be recorded on Goldman's blockchain platform, according to executives of the two firms.

The project has already signed up fund titans including BlackRock , Fidelity Investments and Federated Hermes , as well as the asset management arms of Goldman and BNY.

The Wall Street giants believe that tokenizing the $7.1 trillion money market industry is the next leap forward for digital assets after President Donald Trump last week signed a law marking the arrival of U.S.-regulated stablecoins. The GENIUS Act is expected to boost the popularity and use of stablecoins, which are typically pegged to the U.S. dollar, and JPMorgan Chase , Citigroup and Bank of America have said they are exploring their use in payments.

But unlike stablecoins, tokenized money market funds pay owners a yield, making it an attractive place for hedge funds, pensions and corporations to park their cash.

"We have created the ability for our clients to invest in tokenized money market share classes across a number of fund companies," said Laide Majiyagbe, BNY's global head of liquidity, financing and collateral. "The step of tokenizing is important, because today that will enable seamless and efficient transactions, without the frictions that happen in traditional markets."

Money market funds are mutual funds that are typically invested in 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. Traditional money market funds can be liquidated within a day or two, though redeeming shares only happens during market hours.

Institutional and retail investors have rushed into the asset class in recent years, pouring roughly $2.5 trillion into them since the Federal Reserve began a rate-hiking cycle in 2022.