Money market funds have attracted $120 billion this month, signaling a major rotation into the safest parts of the financial system. Total assets now stand at roughly $7.77 trillion, according to the Investment Company Institute.
During the week ending May 20, 2026, MMF assets grew by $16.88 billion, with government taxable funds accounting for nearly all of that increase.
This follows March's record weekly inflow of $148.5 billion, driven by government funds as tracked by the Federal Reserve.
Banks are pushing liquidity outward due to post-2023 banking stress and regulatory constraints like liquidity coverage ratios and supplementary leverage. Money market funds offer competitive short-term yields and daily liquidity, making them a natural alternative for institutional investors.
Meanwhile, stablecoin issuer Tether reported exposure to US Treasuries nearing $120 billion as of Q1 2025, positioning it alongside major sovereign and institutional holders. Both MMFs and stablecoin reserves serve a similar purpose: warehousing short-duration, high-quality liquid assets to back demandable claims.
Tokenized money market fund products are also expanding, with major asset managers creating on-chain representations of MMF shares for 24/7 settlement and programmable treasury management.