Federated Hermes Taps Crypto Infrastructure for Tokenized Funds

Introduction

Federated Hermes, an investment manager with $911.6 billion in assets under management, has partnered with crypto infrastructure provider Prometheum to bring tokenized funds to brokerage clients. The first product is expected in the first quarter of 2027.

Background

The planned collaboration pairs Federated Hermes' investment management business with Prometheum's SEC registered, FINRA member broker subsidiaries, according to an announcement Tuesday.

Objectives

The firms aim to make tokenized products available through the brokerage accounts and adviser relationships investors already use. Prometheum subsidiary ProFinancial will support distribution. Prometheum Capital will provide custody, clearing and settlement for its customers and make Federated Hermes' tokenized products available to introducing brokers through its correspondent clearing platform.

Use Case

Tokenized funds, particularly money market funds, have demonstrated investor interest in blockchain-based access to traditional investments. Their collaboration focuses on extending that access through brokers and investment advisers.

Background

Prometheum's network also includes a secondary trading platform and an SEC registered digital transfer agent. The announcement did not specify whether the initial Federated Hermes product would support secondary trading at launch.

Impact

The partnership adds to the growing overlap between crypto and traditional finance. While crypto platforms expand into tokenized stocks, asset managers are bringing investment funds onto blockchain infrastructure.

Conclusion

Federated Hermes and Prometheum aim to connect those products with the brokerage accounts and adviser relationships investors already use.