Federated Hermes Plans First Onchain Fund Shares in Push Toward Tokenized Asset Management

Federated Hermes, the Pittsburgh-based asset manager overseeing roughly $780 billion in assets, announced today that it plans to launch its first onchain fund shares, marking one of the most significant entries yet by a traditional money manager into blockchain-based securities infrastructure.

The move places Federated Hermes alongside a growing roster of institutional players, including BlackRock, Franklin Templeton, and Fidelity, that have moved beyond spot crypto exposure and into tokenizing core fund products. Where earlier institutional blockchain experiments often involved pilot programs or minority stakes in crypto firms, this announcement signals a direct commitment to putting fund shares on a public or permissioned ledger as an operational product.

Tokenization represents ownership of a fund share as a digital token on a blockchain, enabling near-instant settlement, programmable compliance rules baked into the token itself, and round-the-clock transferability without relying on traditional clearinghouse infrastructure. For money market and fixed-income funds, where Federated Hermes has deep product expertise, the efficiency gains are measurable: settlement that currently takes one to two business days could compress to minutes, and reconciliation costs across custodians and transfer agents could fall substantially.

The announcement arrives as tokenized real-world assets (RWAs) have become one of the fastest-growing segments in decentralized finance. Total onchain RWA value crossed $15 billion earlier this year, driven largely by tokenized U.S. Treasury products. Federated Hermes entering the space with its own fund shares, rather than simply investing in existing tokenized products, adds a supply-side dimension that the market has been waiting for from a firm of its scale.

Regulatory headwinds remain the clearest obstacle. The SEC has not issued comprehensive guidance on how tokenized fund shares fit within the Investment Company Act of 1940, leaving firms to navigate existing exemptions or seek no-action relief on a case-by-case basis. Custody is a related pressure point: qualified custodian requirements under the Investment Advisers Act impose strict standards that blockchain-native custody solutions are still working to satisfy at institutional scale. Federated Hermes has not yet disclosed which blockchain infrastructure it intends to use, which blockchain network will host the shares, or whether the product will be available to retail or only to qualified institutional buyers.

Those details matter enormously for how quickly the product reaches scale. Franklin Templeton's BENJI fund, launched on Stellar and later expanded to Polygon, took several years to accumulate meaningful assets under management despite being a first mover in the tokenized money market space. Federated Hermes has the distribution relationships and regulatory experience to move faster, but legacy system integration with its existing transfer agent and custodial infrastructure will require significant engineering work before any product goes live.

The World Economic Forum projected in 2024 that tokenized assets could represent $16 trillion in value by 2030, a figure that has become a standard reference point in pitch decks across Wall Street. Whether that trajectory holds depends less on demand, which appears robust, and more on whether regulators in the U.S. and Europe can deliver the legal clarity that allows firms to commit fully rather than hedge with pilot programs.

Federated Hermes has not confirmed a launch timeline or named a technology partner. The firm is expected to provide additional details in the coming weeks. For now, the announcement itself carries weight: a firm managing assets at this scale does not signal a product direction without the internal legal, compliance, and technology groundwork already substantially underway.