SEC Greenlights WisdomTree’s Digital Money Market Fund: Is Wall Street Officially Going On-Chain?

WisdomTree Digital Money Market Fund Cleared for Intraday $1 Trading in Landmark SEC Decision

In a move that could reshape how traditional investment products operate in the digital age, the U.S. Securities and Exchange Commission has granted a special exemptive order to the WisdomTree Digital Money Market Fund, allowing it to trade at a fixed $1.00 price throughout the trading day.

The approval, issued on February 24, 2026, marks a significant milestone for blockchain-based financial products. It signals a broader shift in how regulators are approaching tokenized funds and digital asset infrastructure within the framework of existing securities law.

For decades, mutual funds have operated under a forward-pricing model, meaning investors could only buy or redeem shares at the end-of-day net asset value. Under this new structure, however, the WisdomTree Digital Money Market Fund will function differently, introducing intraday transactional flexibility that mirrors digital asset markets.

Source: X(formerly Twitter)

The implications extend far beyond a single fund.

What the SEC’s Exemptive Order Actually Changes

Traditionally, mutual funds calculate their net asset value once per day after markets close. Investors placing buy or sell orders during the day must wait until that calculation is completed to know the exact price at which their shares were transacted.

The SEC’s exemptive order allows the WisdomTree Digital Money Market Fund, trading under ticker WTGXX, to operate at a stable $1.00 share price throughout the trading day. Investors can purchase or redeem shares at that fixed price via registered broker-dealers without waiting for end-of-day valuation.

In practical terms, this means:

Investors gain intraday liquidity at a stable price
Shares can be bought and sold continuously during trading hours
Settlement processes may be significantly accelerated

This structure blends characteristics of traditional money market funds with the operational efficiency of blockchain technology.

Why Blockchain Matters in This Context

The WisdomTree Digital Money Market Fund utilizes blockchain-based infrastructure to tokenize shares. Tokenization allows ownership records to be maintained on a distributed ledger, potentially enabling faster settlement and improved transparency.

Under conventional financial infrastructure, trades can take one to two business days to settle. By contrast, blockchain-based systems can reduce settlement times to near real-time, depending on system design.

The SEC’s approval reflects growing regulatory openness to integrating blockchain into mainstream financial products. Rather than creating a new asset class, the decision adapts existing money market fund regulations to accommodate modern technology.

This distinction is important. The ruling does not exempt the fund from compliance obligations. Instead, it modifies specific operational rules to reflect technological efficiencies.

Liquidity and Investor Access

Money market funds are widely used as cash management tools by both retail and institutional investors. They are designed to maintain a stable $1.00 net asset value while generating modest yield through short-term, high-quality debt instruments.

By allowing intraday $1 trading, the SEC has effectively enhanced liquidity flexibility.

Key benefits include:

Elimination of end-of-day pricing restrictions
Greater transactional convenience for investors
Streamlined access through broker-dealer networks
Improved capital mobility

For investors managing short-term capital allocations, faster access to funds can improve portfolio efficiency.

This model may also appeal to institutions seeking programmable liquidity solutions integrated with digital infrastructure.

Regulatory Oversight and Fairness Considerations

The SEC’s order also addressed concerns about affiliated transactions.

WisdomTree Securities Inc., an affiliate of the fund sponsor, received permission to participate in these trades under regulatory safeguards. The Commission determined that the structure does not create unfair advantages or conflicts that would disadvantage other investors.

Ensuring equal treatment is central to mutual fund regulation. By explicitly addressing affiliated participation, the SEC sought to maintain market fairness while introducing structural innovation.

The order represents a controlled pilot rather than a sweeping industry-wide reform. However, it establishes a precedent that other asset managers may seek to follow.

Implications for the Broader Financial Industry

The approval may accelerate competition across several segments of the financial market.

Traditional banks offer savings accounts and short-term deposit products. Stablecoins provide digital-dollar exposure within crypto markets. Money market funds sit between these two models, offering regulated yield at a stable value.

By combining blockchain settlement with regulated fund structure, WisdomTree positions its product at the intersection of these competing systems.

This raises several strategic questions:

Will traditional asset managers seek similar exemptions?
Will banks expand tokenized cash equivalents?
Will stablecoin issuers face stronger competition from regulated on-chain funds?

Analysts suggest that tokenized money market funds could become a bridge between decentralized finance and regulated capital markets.

The Race for Yield in a Digital Era

Yield remains one of the most powerful forces in capital markets.

In periods of monetary tightening or higher interest rates, money market funds often attract significant inflows as investors seek low-risk returns.

If tokenized funds offer comparable yield with improved settlement speed, they may capture a growing share of capital.

This dynamic could pressure other fund sponsors to modernize infrastructure or enhance returns to remain competitive.

At the same time, adoption may depend on investor comfort with blockchain-based systems. While institutional players have grown more familiar with digital asset custody, some retail investors remain cautious.

Integration Rather Than Disruption

One notable aspect of the SEC’s decision is that it does not dismantle existing regulatory frameworks.

Instead of creating a new asset category, the Commission applied existing money market fund rules while granting operational flexibility.

This approach signals regulatory evolution rather than revolution.

Rather than viewing blockchain as a disruptive force operating outside regulation, the SEC appears to be integrating it into established financial architecture.

That shift may encourage more asset managers to pursue tokenized products under federal supervision.

Risks and Considerations

Despite the innovation, risks remain.

Money market funds aim to maintain a stable $1.00 share price, but they are not guaranteed. Investors can lose money, particularly during periods of market stress.

Additionally, blockchain-based systems introduce technical risks, including cybersecurity vulnerabilities and operational disruptions.

The fund is not insured by the Federal Deposit Insurance Corporation, and investors should evaluate risks carefully before allocating capital.

Regulators and asset managers alike will likely monitor operational performance closely during the initial rollout phase.

What Comes Next

While the current order applies specifically to the WisdomTree Digital Money Market Fund, industry observers anticipate that other firms may seek similar relief.

If additional funds receive comparable approval, tokenized money market products could become a mainstream component of short-term capital management.

Future developments may include:

Expanded broker-dealer integration
Institutional onboarding initiatives
Cross-platform settlement interoperability
Regulatory refinements based on pilot outcomes

The pace of adoption will depend on market demand, operational reliability, and continued regulatory clarity.

Conclusion

The SEC’s exemptive order for the WisdomTree Digital Money Market Fund represents a pivotal moment in the convergence of blockchain technology and traditional finance.

By allowing intraday $1 trading within a regulated mutual fund structure, regulators have acknowledged that digital infrastructure can coexist with established investor protections.

The decision does not signal a wholesale transformation overnight. However, it establishes a blueprint for how tokenized financial products may evolve under federal oversight.

As capital markets continue to digitize, this development may be remembered as one of the first major steps toward on-chain mutual funds operating within the mainstream financial system.

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Writer @Erlin
Erlin is an experienced crypto writer who loves to explore the intersection of blockchain technology and financial markets. She regularly provides insights into the latest trends and innovations in the digital currency space.
 
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