Tokenised money market funds (MMFs) will continue to grow, but without regulatory change they will find it hard to take more than 10 to 15 percent of the stablecoin market, a forecast said.

According to a recent report by The Block, an analyst team led by JPMorgan managing director Nikolaos Panigirtzoglou (니콜라오스 파니기르초글루) said in a note that tokenised MMFs provide yield to investors but remain at about 5 percent of stablecoin market capitalisation.

Stablecoins have become the preferred cash instrument in the crypto ecosystem. They are widely used for collateral management, trading, settlement, cross-border payments and liquidity management across centralised exchanges and DeFi protocols.

By contrast, tokenised MMFs are at a "structural regulatory disadvantage", JPMorgan analysts pointed out. Unlike stablecoins, tokenised MMFs are generally classified as securities. They must meet securities law requirements such as registration, disclosure and reporting obligations, and transfer restrictions, making them hard to circulate freely on-chain.

Because of these constraints, the main users of tokenised MMFs are limited to crypto-native investors seeking yield on idle cash and institutional investors that want tokenisation advantages such as rapid settlement and programmability while remaining within existing investor protection frameworks, the analysts said.

The analysts said tokenised MMFs will grow faster than stablecoins because of their yield advantage, but will not fundamentally change the balance between the two markets.

JPMorgan analysts forecast that without regulatory changes that reduce the structural disadvantage created by tokenised MMFs being classified as securities, they will find it hard to exceed 10 to 15 percent of the stablecoin market.