$900 billion asset manager Federated Hermes taps crypto infrastructure to bring tokenized funds to brokerages

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.

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

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.

The announcement did not identify the first fund, its underlying investments or the blockchain it would use.

“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 said the partnership would allow the asset manager to distribute products through regulated intermediaries while applying the operational and investment standards used across its existing fund lineup.

For Prometheum, the collaboration is intended to establish a route for asset managers to issue and distribute digital securities through conventional brokerage infrastructure.

“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 described the partnership as a potential model for combining an asset manager with registered brokers providing offering, custody and clearing services.

The firms highlighted tokenized funds, particularly money market funds, as a use case that has demonstrated investor interest in blockchain based access to traditional investments. Their collaboration focuses on extending that access through brokers and investment advisers.

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.

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.

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