Federated Hermes to issue tokenized fund shares in early 2027

Federated Hermes, a $911 billion asset manager, is moving beyond third-party tokenization experiments to issue its own blockchain-based fund shares in early 2027. This marks a major institutional commitment to onchain finance and signals accelerating adoption of tokenized securities among Wall Street’s largest players.

• Federated Hermes plans to launch tokenized fund shares in early 2027, taking direct control rather than relying on third parties.
• Money market funds are the likely starting point, leveraging the firm’s $911 billion in assets and deep expertise in liquidity management.
• Prometheum will handle custody, clearing and settlement, making products available through traditional brokerages and financial advisers rather than only blockchain-native channels.

• $911B Assets under management at Federated Hermes, positioning it among major institutional players.
• Early 2027 Timeline for launch of first tokenized fund share classes.
• $5.5T Citi projection for tokenized securities market size by 2030.
• 15 years Kevin Barr’s tenure at BNY before joining Federated Hermes in May 2026.

CoinDesk reported Tuesday that Federated Hermes, the Pittsburgh-based asset manager, intends to issue tokenized fund shares directly in early 2027. The initiative extends the firm’s prior blockchain experiments, which involved London-based Archax, Goldman Sachs and Singapore-based Conduit Digital tokenizing existing fund products. With this new effort, Federated Hermes will take an operational lead in issuing tokenized share classes itself rather than relying on external platforms to create digital versions of conventional holdings.

Money market funds positioned as the natural entry point

Kevin Barr, director of digital asset products and platform at Federated Hermes, told CoinDesk that money market funds represent the logical starting point given the firm’s substantial liquidity management business. Such funds invest in short-term debt and allow investors to park cash while earning yield, a use case that has already driven tokenization efforts across Wall Street at firms including BlackRock, Franklin Templeton and JPMorgan.

You can have instantaneous movement of those funds. You can have programmability of those funds in a way that is perhaps more difficult or operationally inefficient with traditional infrastructure.

Kevin Barr, director of digital asset products and platform, Federated Hermes

Tokenized money market funds enable 24-hour asset settlement and can serve as collateral for loans or trades, allowing firms to deploy cash reserves without liquidating positions. Citi has projected that the tokenized securities market could reach $5.5 trillion by 2030, underscoring institutional conviction in the technology’s potential to reshape market infrastructure.

Distribution through Prometheum bridges traditional brokerages and blockchain infrastructure

Federated Hermes has partnered with Prometheum, a New York-based digital securities infrastructure provider, to handle regulated brokerage, custody and clearing services. Prometheum’s SEC-registered broker-dealer subsidiaries will provide the operational backbone, while its correspondent clearing platform allows other broker-dealers to offer Federated Hermes’ tokenized products to their clients without requiring system overhauls.

Barr, who previously spent 15 years at BNY Mellon where he led digital cash and innovation initiatives, joined Federated Hermes in May 2026 and emphasized that access, rather than underlying blockchain technology, represents the primary barrier to wider institutional adoption.

By embedding tokenized securities within established distribution channels, Federated Hermes positions the products as a natural extension of its existing franchise rather than as a specialized or experimental offering. This approach differs markedly from earlier tokenization efforts that required investors to access blockchain-native platforms or specialized infrastructure.

The BlockWest read. Federated Hermes’ shift toward self-issued tokenized funds reflects institutional confidence that blockchain infrastructure can support trillions in mainstream finance. The real competitive pressure, however, lies not in blockchain technology itself but in distribution: Prometheum’s role as a regulatory bridge suggests that custody, clearing and broker-dealer licensing remain the genuine gatekeepers to institutional adoption.

Federated Hermes has not disclosed which specific blockchains will host its tokenized funds or which initial fund products will launch. Watch for those details in coming months as the firm works toward the early 2027 launch window and for any regulatory guidance from the SEC or financial advisers’ compliance teams on distributing blockchain-based share classes through traditional channels.

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