Federated Hermes Tokenized Fund Plan: Who Would Hold the Shares

On 13 October 2026, the fund manager Federated Hermes announced a plan to issue its own tokenized fund shares through brokerage firms, with the crypto securities firm Prometheum as its partner. The firms say the first product should reach the market in the first quarter of 2027.

CoinDesk describes Federated Hermes as a Pittsburgh-based manager overseeing about $911 billion in assets. For a holder, the useful question is narrower: what would you actually own, and who would be holding it for you?

What did Federated Hermes and Prometheum announce?

They announced a strategic partnership to issue tokenized securities funds, and nothing is on sale yet. The joint release on Business Wire says the firms “expect to bring the first tokenized fund product to market in Q1 2027.” CoinDesk reports the same timing as early 2027.

The release splits the jobs like this:

Role	Firm, as the release describes it
Investment management and tokenized fund products	Federated Hermes
Digital securities infrastructure	Prometheum, through its broker-dealer subsidiaries
Distribution support	ProFinancial
Custody, clearing and settlement	Prometheum Capital
Digital transfer agent	Prometheum Coinery

Aaron Kaplan, Prometheum’s founder and co-CEO, said in the release that the firm views the partnership “as a blueprint for how the securities industry can issue and distribute digital securities.” Kevin Barr, who the release names as Federated Hermes’s director of digital assets, said tokenized funds are “the logical next step for our broker-dealer and RIA clients.” Those are the companies describing their own plan.

What is a tokenized fund share?

A tokenized fund share is a version of a fund’s shares where the record of who owns what is kept on a blockchain. The fund underneath is still a fund.

Start with the fund part. The SEC’s investor site, Investor.gov, explains share classes: some mutual funds offer different types of shares, all classes hold identical investments, but each class has different fees and expenses. That last point matters later.

Then the record part. Investor.gov says transfer agents work for the issuer to record changes of ownership, and must be registered with the SEC or a bank regulator. The release says Prometheum has an SEC-registered digital transfer agent, Prometheum Coinery. We report that as the company states it.

What is new about this plan?

What is new is that the fund manager itself plans to issue the tokenized share class. CoinDesk reports Federated Hermes has worked before with Archax in London, Goldman Sachs and Conduit Digital in Singapore, where those partners created tokenized versions of its existing products. This time, CoinDesk says, “Federated Hermes now intends to issue tokenized fund share classes itself.”

So instead of a partner wrapping a fund in a token, the manager plans to issue the token shares directly, and sell them through broker-dealers. CoinDesk places the move alongside work by BlackRock, Franklin Templeton, JPMorgan and New York Life. We looked at a different model, a fund issued straight onto a public ledger, in our piece on tokenized funds on the XRP Ledger.

Who would hold the shares?

Prometheum Capital would, according to the release, which says it “will custody, clear, and settle products on behalf of its customers.” The release says Prometheum’s broker-dealer subsidiaries are SEC-registered and FINRA members. FINRA, the Financial Industry Regulatory Authority, oversees broker-dealers.

The release also says Prometheum Capital would offer the products to other broker-dealers through a correspondent clearing platform. CoinDesk explains this would let other brokers offer them to their own clients. So the plan, as described, is that you would see these shares through a broker, and the custody would sit with Prometheum Capital.

Neither the release nor CoinDesk describes customers holding these shares in their own crypto wallets.

What does a tokenized fund plan mean for the money you hold?

It means three things, none of them about price.

1. There is no product today. By the firms’ own timeline, the first one is expected in Q1 2027.
2. A tokenized fund share is not a coin in your wallet. As described, it would be a fund share held through a broker, with a token used as the ownership record.
3. The word “tokenized” says little about custody. In crypto you might hold your own keys. In a brokerage account, a firm holds the asset for you under securities rules. Both are real choices with different risks and different paperwork.

So when a headline says a fund is going onchain, the first job is to ask who has custody. We cover the same question for exchange accounts in what Coinbase’s terms say about freezing accounts.

What hasn’t been disclosed?

Most of what a holder would need. CoinDesk reports “the firm has not yet disclosed which funds it plans to tokenize or which blockchains they will use.” When we read the release, it also did not name who could buy, any minimum, or fees for this product.

Remember the Investor.gov line: each share class has its own fees and expenses. Until a tokenized class publishes its fee details, you cannot compare it with the classes that already exist. As of 14 October 2026, we also did not find an SEC filing for a tokenized Federated Hermes fund. That does not mean one won’t appear.

Why are money market funds mentioned?

Because Barr told CoinDesk that “money market funds are a likely starting point.” That is his view of a likely first step, not an announced product. The release makes a similar point, saying money market funds “have emerged as a notable use case in the tokenized asset market.”

Investor.gov describes money market funds as mutual funds that invest in liquid, short-term debt, cash and cash equivalents. It also says money in a money market fund is not guaranteed by the FDIC like bank accounts are, and that you may lose some or all of the money you invested. Barr told CoinDesk a token version allows “instantaneous movement of those funds.” That is the company’s description of a benefit, not something we have seen tested on a live product.

One note on sources: CoinDesk discloses that it is owned by Bullish, a crypto company, and that its staff may receive Bullish equity as pay.

What are the limits of what we know?

• This is a plan, and the release includes standard cautions about forward-looking statements.
• The roles, registrations and quotes come from the companies.
• The fund, blockchain, eligibility and fees have not been disclosed.
• The money market idea is one executive’s view, as reported by CoinDesk.
• This is a US plan. Rules elsewhere may differ.

You can check one thing yourself. Investor.gov points investors to BrokerCheck, a FINRA site for looking up broker-dealers, so you don’t have to take a release’s word for a registration.

What would change this view?

Our read is that this is a plan whose holder-relevant details are not yet published. That changes if the firms name the fund, blockchain, eligibility and fees, if an SEC filing for a tokenized share class appears, or if customers can hold the shares in their own wallets. In fairness, the firms see this as a template for the industry. The caution comes from the release itself, which warns that plans can change.

Three questions to ask about any tokenized product

Question	What to look for	In this story (as of 14 Oct 2026)
Who issues it?	The manager’s own share class, or a partner’s token version?	Federated Hermes plans to issue its own class (CoinDesk)
Who would hold it for you?	The words custody, clearing and settlement, and the firm named next to them	Prometheum Capital (release)
What is still undisclosed?	Fund name, blockchain, who can buy, fees	All four

If any line in the third row is blank, the product is not fully described yet. For the wider rule changes behind onchain shares, see our explainer on the SEC’s transfer agent proposal.

What to watch next

Watch which fund the firms name first, which blockchain it uses, who can buy it and at what fees, and whether an SEC filing appears. None of those is about price. They are about knowing what a product actually is.