BlackRock, the world's largest asset manager, has signed a memorandum of understanding with SBI Holdings and Startale Group to explore connecting tokenized money market funds with JPYSC, a stablecoin pegged to the Japanese yen. The effort is aimed at examining how tokenized funds and the yen-pegged token could operate together as part of Japan's developing on-chain finance market.

The agreement was announced on October 27 in a release from SBI Group. It was signed by BlackRock Financial Management and BlackRock Japan, and brings together the asset manager's fund business, SBI's financial services, and Startale's blockchain infrastructure.

Under the memorandum, the three companies will study linking tokenized money market funds and JPYSC in three areas: technology and infrastructure; business and distribution; and regulation and market development. Each workstream is intended to assess how the fund products and the stablecoin could be connected in practice.

A money market fund invests in short-term, low-risk assets. A tokenized version of such a fund exists on a blockchain, which allows it to be moved and settled digitally. BlackRock has prior experience in this area: it launched BUIDL, a tokenized fund for institutional investors, in March 2024.

Because the agreement takes the form of a memorandum of understanding, the companies have agreed to explore the idea rather than launch a product at this stage. The firms also said they may work with additional partners as the effort develops, with the goal of supporting the growth of on-chain finance in Japan and in other markets.

Japan's First Trust Bank-Backed Yen Stablecoin

SBI launched JPYSC together with Startale in June of this year. It was the first yen stablecoin in Japan to be backed by a trust bank. Trust-based issuance is a model permitted under Japan's stablecoin framework, in force since June 2023, under which stablecoins can be issued through trust arrangements with reserves held separately on behalf of holders. SBI Shinsei Trust Bank manages the token's issuance, while distribution is handled by SBI VC Trade, a licensed crypto exchange.

What the Executives Said

Executives from all three companies commented on the collaboration in the announcement.

Yukiko Hashimoto, president of BlackRock Japan, said advances in digital assets, including tokenization, are opening up new possibilities for financial markets.

"At BlackRock, we believe these innovations can help advance financial markets and deliver new value to investors in Japan," Hashimoto said.

Jonathan Steel, a managing director at BlackRock Financial Management, said the work with SBI reflects a shared commitment, with both sides aiming to connect traditional finance with digital asset systems.

Yoshitaka Kitao, chairman and president of SBI Holdings, described the shift to on-chain finance as "becoming an unavoidable global trend."

"If Japan is to lead this transformation rather than fall behind, we must prepare early and build the foundations for the next generation of financial markets," Kitao said.

SBI's Broader Stablecoin Partnerships

SBI Holdings is a long-time partner of Ripple. In Japan, Ripple chose SBI Group to launch its RLUSD stablecoin, which is pegged to the US dollar, through SBI VC Trade, the same licensed exchange that distributes JPYSC.

In a separate effort, SBI and Startale joined the Open Standard alliance. Through that group, they are exploring how JPYSC can work with the OUSD stablecoin.

Interest in tokenized real-world assets, including money market funds, has grown as digital asset rules develop in several countries. Firms building in the sector are creating systems that combine tokenized assets with stablecoins, an approach that also requires custody services to protect fund reserves.

SBI and Startale said the agreement with BlackRock is intended to support the development of on-chain finance in Japan and around the world. The announcement did not include a launch date or timeline for any product that may result. For now, the three study areas define the scope of the collaboration.