Federated Hermes to issue tokenized fund shares in Q1 2027

Federated Hermes, the Pittsburgh asset manager, plans to issue its first tokenized fund share classes itself, with Prometheum’s SEC-registered broker-dealers handling distribution, custody, clearing and settlement, the two firms said on Tuesday. They expect the first product in the first quarter of 2027. CryptoWatchDesk last wrote about tokenized securities on 9 Oct, in the IMF’s look at tokenized stocks.

The novelty is the channel, not the token, which works much like other tokenized securities: ownership is recorded on a blockchain. Tokenized US Treasury funds held about $14.91 billion as of Tuesday evening, down 5.5% in 30 days, according to rwa.xyz. That is roughly 1.6% of the $911 billion Federated Hermes manages, by our arithmetic using the figure CoinDesk reported. The plan is to route the product through the broker-dealers and advisers where US savers already hold their funds.

Under the arrangement, ProFinancial, Inc. supports distribution, while Prometheum Capital LLC custodies, clears and settles the products and makes them available to other brokers that clear through it. “Until now, tokenized funds have primarily been issued on platforms that sit outside the mainstream brokerage system where most Americans invest,” said Aaron Kaplan, Prometheum’s founder and co-chief executive.

The firms have not named the funds, the blockchain networks, fees or investor eligibility. Money market funds are a likely starting point, Kevin Barr, Federated Hermes’ director of digital assets, told CoinDesk. The release describes the partnership as planned; no product has launched yet.

This article is for information only and is not investment advice.