Federated Hermes Taps Prometheum to Put Its $911B Fund Lineup Onchain

Federated Hermes oversees $911 billion in assets, and it now wants its fund shares living on a blockchain. The Pittsburgh-based manager plans to issue its first tokenized fund shares in early 2027.

Federated Hermes is partnering with Prometheum, a New York digital securities firm whose broker-dealers are SEC-registered and FINRA members. Together they want tokenized funds sitting inside ordinary brokerage accounts and adviser channels, not only on crypto-native platforms.

Prometheum will handle custody, clearing and settlement for the products. Its correspondent clearing platform will also let other broker-dealers offer them to their own customers. The firm has not said which funds it will tokenize or which blockchains it will use.

Money market funds go first

Kevin Barr, who leads digital asset products and platform at Federated Hermes, said money market funds are the likely starting point. The logic is straightforward. Federated Hermes has built a money market franchise over more than 50 years and runs roughly $676.9 billion in money market assets.

Those funds hold short-term debt and serve as a parking spot for idle cash. A token version can move around the clock and act as collateral for loans or trades, which is exactly what cash managers want.

This time it is in-house

The firm is not new to tokenization, but earlier work with Archax, Goldman Sachs and Conduit Digital had third parties issuing the digital versions of its funds. This time Federated Hermes intends to issue the tokenized share classes itself.

Aaron Kaplan, founder and co-CEO of Prometheum, called the arrangement a blueprint for how the securities industry can issue and distribute digital securities. He noted that tokenized funds have so far been issued mainly on platforms outside the mainstream brokerage system where most Americans invest.

Why this matters beyond one fund

Access has been the real bottleneck, not blockchain throughput. Advisers and brokerages need a way to offer tokenized funds without rebuilding their systems.

Citi projects the tokenized securities market could reach $5.5 trillion by 2030. Every large manager that joins pushes tokenized cash closer to routine portfolio infrastructure instead of a crypto-native sideshow. The funds themselves are not crypto products in disguise — they are the same short-term debt vehicles in a share class that settles faster.