Key Highlights:
- Federated Hermes has partnered with digital asset firm Prometheum to distribute tokenized investment products across traditional brokerage networks.
- Prometheum subsidiaries ProFinancial and Prometheum Capital will facilitate distribution, custody, clearing, and settlement for introducing brokers and clients.
- The initiative seeks to integrate blockchain-based funds, including money market vehicles, directly into standard brokerage accounts and registered investment adviser (RIA) workflows.
Federated Hermes and Prometheum Forge Tokenized Fund Distribution Alliance
Global asset manager Federated Hermes has entered into a strategic collaboration with digital asset infrastructure firm Prometheum to bring tokenized investment funds into mainstream brokerage channels. Under the agreement, Prometheum subsidiary ProFinancial will support fund distribution, while Prometheum Capital will manage custody, clearing, and settlement services. Furthermore, Prometheum Capital plans to make the tokenized offerings available to introducing brokers via its established correspondent clearing platform. While the initiative marks a significant step toward tokenizing traditional financial instruments, the initial announcement did not identify the first fund slated for issuance, its underlying investments, or the specific blockchain network selected to host the assets.
The alliance is designed to bridge the gap between blockchain-based financial assets and conventional wealth management infrastructure. Through this setup, Federated Hermes aims to meet shifting demand from institutional and retail channels without departing from standard compliance mechanisms. Tokenized funds are the logical next step for our broker-dealer and RIA clients, who increasingly see demand for on-chain access to traditional investments,
said Kevin Barr, director of digital assets at Federated Hermes. Barr noted that the arrangement enables the asset manager to distribute products through regulated intermediaries while continuing to enforce the operational and investment standards that govern its broader product catalog.
Bridging Traditional Brokerage Systems with Digital Securities
For Prometheum, teaming up with an established asset manager reinforces its ongoing effort to build compliant pathways for issuing and distributing digital asset securities. Historically, the infrastructure supporting tokenized assets has developed parallel to, rather than within, mainstream retail brokerage networks. Until now, tokenized funds have primarily been issued on platforms that sit outside the mainstream brokerage system where most Americans invest,
said Aaron Kaplan, Prometheum’s founder and co-CEO. Kaplan framed the tie-up as a potential operational model that pairs traditional asset management with registered broker-dealers capable of handling offering, custody, and clearing services under existing regulatory frameworks.
Beyond distribution and custody, Prometheum operates an ecosystem that features a secondary trading venue and a transfer agent registered with the U.S. Securities and Exchange Commission (SEC). The joint announcement did not indicate whether the debut Federated Hermes product will feature secondary market trading capabilities immediately at launch. Both companies pointed to tokenized money market funds as a primary example of how blockchain technology can deliver traditional cash-management and fixed-income products to modern investors, focusing their joint efforts on empowering registered investment advisers and broker-dealers to access these tools seamlessly.
Why This Matters
The collaboration reflects the ongoing convergence between traditional finance (TradFi) and blockchain-powered market infrastructure. While decentralized finance and crypto platforms have pushed into tokenized equities, established fund managers are actively seeking ways to move conventional asset classes on-chain to gain operational efficiencies and capture investor interest. By relying on registered intermediaries rather than off-market venues, Federated Hermes and Prometheum are targeting the core accounts where mainstream capital resides, allowing investors to hold digital securities within familiar advisory and brokerage setups without abandoning existing investor protections.
Frequently Asked Questions
Which funds will Federated Hermes tokenize first?
The announcement did not specify the identity of the initial fund, the underlying assets it will hold, or the specific blockchain network selected to support the tokenized product.
What roles do Prometheum and its subsidiaries play in this partnership?
Prometheum subsidiary ProFinancial will handle product distribution, while Prometheum Capital will provide custody, clearing, and settlement services, including offering the tokenized products to introducing brokers through its correspondent clearing platform.
Will the tokenized funds support secondary market trading immediately?
Although Prometheum operates an SEC-registered digital transfer agent and a secondary trading platform, the firms have not specified whether the inaugural Federated Hermes product will be available for secondary trading upon launch.
