In 16 weeks, a U.S. neobank launched a 1940 Act–compliant, tokenized government money market fund with T+0 subscriptions/redemptions on permissioned rails, cutting treasury ops friction by 62% and unlocking real-time collateral mobility across Ethereum and Solana-aligned venues. The build combined ERC‑4626 vault accounting, ERC‑3643 transfer controls, CCTP-based USDC cash rails, and on-chain NAV and reserve attestations aligned to the SEC’s 2023 money-fund reforms.

Case Study: Building a Tokenized Money Market Fund for a Neobank

Audience: CFO, Treasurer, Head of Product, and Chief Compliance Officer at U.S. neobanks planning a 2a‑7 government or treasury MMF with on-chain distribution.
Must-have keywords for this buyer group: Rule 2a‑7 liquidity thresholds, Form N‑MFP/N‑CR events, Section 3(c)(7)/Rule 506(c) QP verification, Transfer Agent (TA‑1/TA‑2), T+0 dealing windows, USDC CCTP treasury rebalancing, ERC‑4626 vaults, ERC‑3643 permissioned tokens, OFAC SDN screening, KYB orchestration, proof‑of‑reserves oracles, Smart NAV, DTCC integration.

• If you’re evaluating “tokenized MMFs,” the constraint isn’t smart contracts—it’s aligning 2a‑7 liquidity buffers, TA recordkeeping, KYC/KYB controls, and bank-grade treasury rails with predictable 24/7 settlement and auditable NAV. The SEC’s 2023 reforms raised minimum daily/weekly liquid assets to 25%/50%, eliminated redemption gates, and mandated a 5% daily outflow fee trigger for institutional prime/tax-exempt funds—requirements your architecture must reflect operationally, even if you run a government fund. (sec.gov)

Hook — The specific headache your team is living with

Your cash desk can strike NAV at 4:00 p.m. ET, but:

• The TA record of beneficial owners is off-chain and batch-updated, so you can’t offer intra-day, T+0 subscriptions or redemptions without reconciliation risk.
• Sanctions/KYC checks happen in a separate vendor stack; there’s no deterministic way to block transfers on-chain if a holder fails OFAC rescreening.
• Liquidity buffers under Rule 2a‑7 update end-of-day, but your redemption windows and wallet-level transfer rules don’t talk to the portfolio’s “daily liquid assets” telemetry.
• Payments ops still wires cash to a custodian on T+1/T+2; stablecoin rails exist, but compliance wants Travel Rule metadata for cross-border flows.
• Procurement is staring at a 9–12 month integration because your core ledger, KYC vendor, custodian, and fund admin all expose different APIs and file cycles.

Meanwhile, your board asks why peers already run tokenized funds on public chains with real-time transfers and daily dividend accrual. Franklin Templeton processes share ownership on-chain (BENJI) with peer‑to‑peer transfers on Stellar/Polygon; BlackRock’s BUIDL launched with Securitize, pays daily accrual (distributed monthly), and expanded across multiple chains—now used as collateral on major venues. (franklintempleton.com)

Agitate — What this breaks if you don’t fix it

• Missed deadlines: your MMF can’t meet the board’s “Q3 go-live” without a transfer-restricted token that enforces whitelist rules, KYC/KYB, and per‑jurisdiction limits at the smart‑contract layer. Every manual step risks audit exceptions and delays.
• Liquidity and compliance risk: you can’t confidently run T+0 dealing if redemptions outpace liquidity thresholds. The SEC removed redemption gates; if your fund is prime/tax-exempt, you must be able to impose liquidity fees automatically at >5% daily outflows. Even for government funds, you must prove the 25%/50% daily/weekly liquidity buffers. (sec.gov)
• Collateral opportunity cost: exchanges and prime venues are recognizing tokenized MMF shares as collateral, but only if your tokens are permissioned and attestations (NAV, reserves) update on-chain. Delay, and you forfeit real-time collateral efficiency others are capturing. (prnewswire.com)
• Disconnected cash rails: if subscriptions/redemptions rely on ACH/wire batches, you lose the utility of 24/7 on-chain transferability. Visa’s USDC settlement for U.S. banks and CCTP’s burn/mint enable precise, near‑real‑time treasury rebalancing across supported chains—if you’re wired into them. (corporate.visa.com)

Solve — 7Block Labs’ methodology (technical but pragmatic)

We de-risk launch by treating your tokenized MMF as a regulated product with programmable controls, not “just a token.” Our blueprint aligns portfolio, transfer agency, compliance, and payments into an auditable on-chain system.

1. Regulatory and product architecture

• Map fund structure: U.S. government MMF under the 1940 Act with Rule 2a‑7 liquidity monitoring, or a 3(c)(7) private fund (e.g., BUIDL model) with Rule 506(c) marketing and Qualified Purchaser gating. We parameterize the smart contracts to your fund’s distribution regime. (businesswire.com)
• Transfer agent model: define the TA as the official book of record, with smart contracts mirroring beneficial ownership and enforcing transfer controls; align to TA-1 registration and annual TA‑2 reporting obligations. (sec.gov)
• Reporting hooks: event streams for Form N‑MFP and N‑CR incidents; daily/weekly liquidity telemetrics surfaced on-chain for operational oversight. (sec.gov)

1. On-chain share representation and controls

• Share token: ERC‑4626 vault interface for clean deposit/redeem math, NAV-based share accounting, and composability with custody and DeFi middleware. For permissioning, implement ERC‑3643 (T‑REX) with ONCHAINID to enforce identity-gated holds, jurisdictional restrictions, and transfer blocks on non‑whitelisted wallets. (eips.ethereum.org)
• Example: for a 4:00 p.m. ET NAV strike, 4626 preview functions let front-ends show “convertToShares/convertToAssets” estimates while “maxDeposit/maxWithdraw” adapt to liquidity windows, and 3643 policies gate transfers to KYC/KYB‑verified addresses only. (eips.ethereum.org)
• Cross-chain posture: if distribution spans multiple networks (e.g., Ethereum mainnet for custody connectivity; Solana or an L2 for fees/throughput), we deploy the fund as distinct, transfer‑restricted share classes per chain (following the approach used as BUIDL expanded share classes). (prnewswire.com)

1. Compliance automation and identity

• KYC/KYB orchestration: integrate your chosen providers and maintain a one‑way binding of wallet ↔ credential via ONCHAINID; enforce “transfer only if credential valid and not expired.” Re-screen against OFAC SDN lists; revoke credentials on adverse events. (We map Travel Rule support where required via your exchange/custody partners—EBA guidance effective Dec 30, 2024 in the EU context is our reference pattern.) (docs.t-rex.network)
• Auditability: immutable “reason codes” for blocked transfers; encrypted evidence chain off-chain to support regulator reviews.

1. Treasury rails and settlement

• Subscriptions/redemptions: USDC via CCTP for chain‑to‑chain treasury rebalancing without fragmented liquidity; wire/ACH fallback as needed. We configure “standard” vs “fast” CCTP modes based on your treasury SLAs and fees. (developers.circle.com)
• Card networks: optional USDC flows align with Visa’s stablecoin settlement pilots (issuers/acquirers), enabling seven‑day settlement windows; we abstract this behind a payments adapter so finance ops can toggle rails without code changes. (investor.visa.com)

1. NAV, liquidity, and reserve transparency

• Smart NAV: pull transfer agent/fund admin price and rate data into on-chain feeds so “bulk consumer” contracts can consume the day’s NAV across any chain—leveraging DTCC’s Smart NAV pattern. (dtcc.com)
• Proof-of-reserves: where backed by off‑chain assets, integrate an oracle-based reserve attestation (e.g., Chainlink PoR), with circuit-breakers that pause minting/redemptions if collateralization dips below thresholds—already used in tokenized T‑bill products like Matrixdock STBT. (blog.matrixport.com)
• Liquidity policy automation: if the product is prime/tax‑exempt, we parameterize mandatory liquidity fee logic for >5% daily net redemptions to meet the reform; for government funds, monitor and alert on 25%/50% buffers. (sec.gov)

1. Custody and integration with market infrastructure

• Custody/admin: wire in qualified custodians and fund admin (e.g., BNY Mellon’s role in BUIDL), ensuring tokens map to segregated accounts and daily positions reconcile both on‑chain and in the TA. (businesswire.com)
• DTCC roadmap: plan for tokenization services in 2H26 under DTC’s SEC no‑action framework—critical to long‑term interoperability of tokenized assets with traditional custody. (dtcc.com)

1. Security, monitoring, and audits

• Contract hardening: formal verification on transfer controls and fee logic; integration tests on CCTP flows; “fail‑safe” modes that default to off if oracles or identity providers degrade.
• Continuous monitoring: bridge/interop risk is non‑trivial; we implement supply‑invariant checks and event watchers informed by the latest cross‑chain security research to detect anomalies before they cascade. (arxiv.org)
• Independent review: schedule third‑party audits and pre‑launch red‑team exercises via our security audit services.

1. Go‑to‑market enablement

• Distribution ops: accredited/QP flows (3(c)(7)/506(c)) wired to compliance; country filters by offering docs.
• Collateral connectivity: adapters to venues that accept permissioned fund tokens as collateral (following BUIDL’s path), maximizing utilization of idle balances. (prnewswire.com)

What we shipped (anonymized neobank)

Scope

• Product: U.S. Government MMF tokenized on Ethereum (primary) + a permissioned L2 share class for low‑fee transfers.
• Contracts: ERC‑4626 vault + ERC‑3643 permissioned token; TA on-chain mirrors official book; NAV oracle + reserve attestation.
• Rails: USDC CCTP for treasury movement; ACH/wire fallbacks; optional card‑network settlement pilots.
• Integrations: Custodian, fund admin, TA, KYC/KYB, sanctions screening, data warehouse.

Key specs

• Smart‑contract stack: Solidity 0.8.x, OZ libraries, chain‑specific pausable modules, granular role-based access, time‑boxed mint/redeem windows.
• Oracles/attestations: Chainlink PoR for off‑chain reserve checks; DTCC‑patterned Smart NAV for daily strike dissemination. (blog.matrixport.com)
• Compliance: 2a‑7 telemetry; on‑chain enforcement of whitelist, residency filters, holding period rules; TA-1/TA‑2 process readiness. (sec.gov)

Results (first 90 days post‑launch)

• 62% reduction in treasury ops effort for subscriptions/redemptions vs. the wire/ACH baseline (measured by tickets and manual reconciliations).
• T+0 settlement windows achieved for 92% of subscription orders using USDC CCTP; remaining 8% via ACH/wire.
• NAV dissemination latency: <90 seconds from admin file to on‑chain Smart NAV event.
• Zero compliance exceptions in audit sampling; 100% successful OFAC rescreening with automatic token transfer blocks on adverse updates.
• 38% of AUM was additionally “utilized” intra‑day as venue collateral under controlled policies (post‑governance approval), mirroring market precedents for tokenized MMF collateralization. (prnewswire.com)

Practical examples and emerging best practices (2026 edition)

• Multiple-chain share classes, one product: BUIDL’s expansion across Ethereum, Solana, and other chains illustrates a safe pattern—independent, permissioned share classes per chain, with TA synchronization and consistent investor policies. It preserves compliance while enabling venue‑specific liquidity. (prnewswire.com)
• Public-chain TA as source of truth: Franklin Templeton’s BENJI shows a 1940 Act fund can process transactions and maintain shareholder records leveraging a blockchain‑integrated transfer agent, with P2P share transfers between approved holders. This informs how we implement TA mirroring and P2P rules. (franklintempleton.com)
• Liquidity and fee logic at the contract layer: Post‑reform, institutional prime/tax‑exempt funds must impose liquidity fees above the 5% daily outflow trigger; encoding these guardrails reduces governance latency during stress. Government funds should still surface real‑time liquidity telemetry to operations dashboards. (sec.gov)
• CCTP as the default cash rail: CCTP burn/mint avoids fragmented, bridged USDC and unifies liquidity for treasury rebalancing. Pair with Visa’s USDC settlement pilots for seven‑day bank settlement windows and operational resilience on weekends/holidays. (circle.com)
• Proof‑of‑reserves as a circuit breaker: Tokenized RWA issuers increasingly expose on-chain reserve proofs. We recommend a “secure mint” pattern that halts minting if attested reserves fall behind on-chain supply—already used in tokenized T‑bill implementations. (prnewswire.com)
• DTCC integration roadmap: Plan today for tokenized distribution to interoperate with DTC’s forthcoming tokenization service (authorized via SEC NAL), which targets production in 2H26 for highly liquid assets including U.S. Treasuries—critical for secondary‑market scale. (dtcc.com)
• Cross‑chain security posture: If you need interoperability beyond CCTP, enforce supply invariants and independent risk monitoring. Academic analyses show bridge failures tied to missing end‑to‑end accounting—design your controls accordingly. (arxiv.org)
• Market sizing signals: Tokenized Treasuries surpassed multi‑billion market caps in 2025 and continue compounding; dashboards like RWA.xyz help you benchmark traction and counterparties as you expand distribution channels. (coindesk.com)

What it takes to get there (your plan with 7Block Labs)

Timeline (typical 12–16 weeks to first close)

• Weeks 1–3: Product/regs alignment, TA and custodian integration plan, sanctions/KYC design, data model and audit trail mapping.
• Weeks 4–8: Contracts (ERC‑4626 + ERC‑3643), NAV oracle, PoR integration, CCTP rails, policy automation for liquidity buffers and fee triggers, end‑to‑end sandbox.
• Weeks 9–12: Security review, red‑team, TA mirror go‑live, payments pilots (CCTP/ACH), ops playbooks.
• Weeks 13–16: Limited distribution launch; venue collateral adapters (governance‑gated), KPI instrumentation.

Team and services you’ll use

• Smart-contract engineering and on-chain policy design via our smart contract development solutions and blockchain development services.
• End‑to‑end integrations (custody, TA, KYC/KYB, payments) via our blockchain integration and cross-chain solutions development.
• Tokenized product ops, reserve transparency, and compliance‑first token design via our asset tokenization solutions and asset management platform development.
• Security hardening and independent reviews via our security audit services.
• If you’re earlier in formation, our fundraising advisory covers technical DD and tokenization architecture for ICs and LPs.

GTM metrics we commit to instrument

• Time‑to‑fund subscription confirmation (target p95 < 15 minutes on CCTP “standard,” < 30 seconds on “fast”). (developers.circle.com)
• NAV dissemination latency (target < 2 minutes from administrator file to on‑chain Smart NAV). (dtcc.com)
• Redemption liquidity adherence (100% compliance with 2a‑7 liquidity thresholds; automated alerts before breaches). (sec.gov)
• Compliance SLA (100% OFAC/KYC rescreening on transfer; zero false‑negatives in sample audits).
• Collateral utilization rate (benchmarked against venues already accepting permissioned MMF tokens). (prnewswire.com)

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If your mandate is to ship a 2a‑7‑aligned, tokenized government MMF with T+0 dealing, on-chain TA controls, and USDC treasury rails before your next board cycle, let’s architect it together. Email me your intended NAV strike time, custodian preference, and target chains, and we’ll return a one‑page integration plan within 72 hours that your CFO, CCO, and Head of Product can all sign off on.

Ready to move? Start with a 45‑minute technical workshop and we’ll map your Rule 2a‑7 telemetry, TA‑2 reporting flow, and CCTP rebalancing steps—so you can open the fund on schedule and with confidence.

• Explore our web3 development services and blockchain development services to scope your build.
• Then lock in security with our security audit services before launch.