Can a Tokenized Money Market Fund Trade 24/7 at $1?
A tokenized money market fund can trade at a stable $1.00 throughout the day only when a regulated dealer-principal model absorbs the gap between investor orders and the next calculated NAV. On 23 February 2026, SEC Release IC-35968 gave WisdomTree's Treasury Money Market Digital Fund relief from Section 22(d), Rule 22c-1 and specified affiliated-transaction restrictions. The order permits intraday liquidity and approximately one-minute USDC settlement, but it does not generally authorize tokenization, peer-to-peer transfers or a 24/7 market without an intermediary balance sheet.
TL;DR — Key Takeaways
- ✓The Order: SEC Release IC-35968 dated 23 February 2026 permits covered dealers to transact at $1.00 per share during the day.
- ✓The Mechanism: An affiliated broker-dealer buys and sells as principal, warehousing the difference between intraday liquidity and the next NAV.
- ✓The Settlement: Investors exchange USDC through a portal; the dealer can settle in approximately one minute without converting USDC to cash.
- ✓The Boundary: The relief covers pricing and specified affiliated transactions, not tokenization, transfer agency or peer-to-peer trading as a whole.
- ✓The Lesson: 24/7 availability is a balance-sheet and control design, not a default capability of a blockchain fund share.
The SEC Approved a Liquidity Model, Not a Token Shortcut
The WisdomTree order makes intraday $1.00 transactions possible by letting a covered dealer act as principal. It does not make the token itself exempt from the Investment Company Act's pricing and transaction rules.
Release IC-35968 was issued on 23 February 2026 to WisdomTree Digital Trust, WisdomTree Securities, WisdomTree Digital Management and WisdomTree Transfers. It permits the dealer to buy and sell shares of the WisdomTree Treasury Money Market Digital Fund, ticker WTGXX, at $1.00 rather than the fund's next-calculated NAV.
The order permits dealers to transact at “$1.00 per share, rather than at the Applicant Fund's next-calculated NAV.”
— SEC Release IC-35968, 23 February 2026
That distinction matters because a tokenized share can move faster than a fund can calculate NAV, but speed does not change the statutory pricing rule. The dealer is the bridge between the two clocks.
Why $1.00 Requires a Principal Dealer
The dealer-principal model carries inventory risk so investors can trade at a fixed $1.00 before the fund's next NAV is known. The blockchain records the transaction; the dealer funds the timing mismatch.
Without a principal, an investor buying at noon would face a price determined by a later NAV calculation. That is the forward-pricing problem under Rule 22c-1. WisdomTree's structure solves it by making the dealer the counterparty for the intraday trade, then reconciling the position to the fund's normal accounting process.
| Clock | Who controls it | What happens |
|---|---|---|
| Investor order | Portal and covered dealer | Buy or sell at $1.00 as principal |
| On-chain delivery | Fund and transfer controls | Record the share and USDC movement |
| Next NAV | Fund accounting | Calculate the ordinary NAV and reconcile dealer inventory |
The economics are therefore closer to a short-duration liquidity facility than to an automated market maker. A fund copying the headline must first find an affiliate willing to carry that exposure.
Amortized Cost Keeps the Fund at Par
The order permits the fund to use amortized cost or penny rounding to maintain a $1.00 share price, subject to the money-market-fund rules. This is an accounting method with a regulatory perimeter, not a promise that the portfolio never changes value.
Treasury bills, repurchase agreements and other eligible instruments accrue toward a stable NAV under Rule 2a-7. The token adds a transfer rail, but it does not remove the portfolio, liquidity, diversification and valuation tests that support the $1.00 convention.
The fixed price is supported by “amortized cost or penny rounding” mechanics.
— WisdomTree order summary, SEC Release IC-35968
That is why the product should not be described as a stablecoin. WTGXX is a registered open-end fund share with a regulated portfolio and a dealer-supported intraday price.
One-Minute USDC Settlement Still Has a Portal
Investors can exchange USDC for fund shares through WisdomTree's portal, and the affiliated dealer can settle in approximately one minute without converting the stablecoin to cash. The portal is the controlled boundary where payment, eligibility and share delivery meet.
That boundary is important for compliance. The fund can keep a record of who entered, which wallet received the share, which dealer stood as principal and how the cash-equivalent leg was confirmed. An open peer-to-peer transfer would remove those assurances and was not part of the relief.
The same principle appears in the SEC's Franklin no-action letter: tokenized fund custody is accepted through a named, controlled intermediary structure, not through a generic claim that a ledger is self-proving.
What the Order Leaves Open
The order is deliberately narrow: it addresses pricing at $1.00 and affiliated transactions. It does not answer every legal question raised by tokenized fund shares.
- Tokenization: the order does not itself authorize a tokenized recordkeeping system.
- Transfer agency: the official shareholder record and transfer controls remain separate questions.
- Peer-to-peer trading: the dealer model does not create an unrestricted secondary market.
- Stablecoin settlement: the approved facts do not make every stablecoin or wallet eligible.
This boundary is the reason F/m's separate ETF filing still needs targeted relief for its own recordkeeping and controlled-transfer design.
A Replication Checklist for Issuers
An issuer testing a 24/7 tokenized-fund model should reproduce the economic and control facts, not copy the marketing language. Five questions expose whether the design is real.
- Which affiliate or covered dealer bears the intraday principal risk?
- How is $1.00 supported when the portfolio NAV moves before the next calculation?
- Where do KYC, sanctions and wallet eligibility checks occur?
- Which transfer-agent record controls when a token and share ledger disagree?
- What happens if the dealer stops quoting, the portal fails or USDC settlement is delayed?
WisdomTree's order shows that regulated 24/7 access is possible. It also shows the price: named counterparties, narrow relief, controlled rails and a dealer balance sheet that stands behind the clock.
Frequently Asked Questions
What did the SEC approve for WisdomTree's tokenized money market fund?
On 23 February 2026, SEC Release IC-35968 permitted WisdomTree Securities and other covered broker-dealers to buy and sell shares of the WisdomTree Treasury Money Market Digital Fund at $1.00 per share on a principal basis during the day. The order also granted affiliated-transaction relief under Rule 17d-1. It did not approve tokenization as a general exemption.
How can the fund keep a stable $1.00 price during the day?
The dealer-principal model lets an affiliated broker-dealer transact at $1.00 rather than the fund's next-calculated NAV. The fund can use amortized cost or penny rounding for its $1.00 share price. The dealer absorbs the difference between intraday investor liquidity and the next NAV calculation.
Does the order allow peer-to-peer token transfers?
No. The relief addresses Section 22(d), Rule 22c-1 and specified affiliated transactions. It does not authorize peer-to-peer trading, transfer-agent treatment or stablecoin settlement as a standalone matter. Any token movement still needs to fit the fund's transfer controls, intermediary relationships and other applicable securities-law requirements.
How does settlement work in the WisdomTree model?
Investors exchange USDC for fund shares through the fund's portal, and the affiliated broker-dealer can settle in approximately one minute without converting the stablecoin to cash. The speed comes from the dealer and portal operating model; it is not a property every tokenized fund gets by deploying on a blockchain.
Who bears the risk between an intraday trade and the next NAV?
The affiliated dealer stands as principal and warehouses the intraday exposure. That balance-sheet commitment is the economic buffer that makes a fixed $1.00 transaction price possible. If the dealer cannot support the inventory, the token does not create a replacement liquidity provider by itself.
Can another fund automatically copy the WisdomTree structure?
No. The order is a staff and Commission action on named applicants and stated facts. A different fund would need its own analysis of pricing, affiliated transactions, custody, transfer agency, stablecoin settlement and investor eligibility. The decision is a useful template, not a universal passport for 24/7 fund trading.
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