Key Takeaways
- • BlackRock sees tokenized money-market funds as a way for institutions to stay invested longer by transferring fund shares on blockchain networks without first redeeming them for cash, according to Crypto Briefing.
- • Tokenized BlackRock funds already serve as collateral in digital asset markets, per Dan Maley, who leads BlackRock's cash business in Asia Pacific.
- • BlackRock's BUIDL fund, launched in 2024, has grown to about $2.3 billion, among the largest tokenized funds of its kind.
- • Broader traditional-finance adoption faces obstacles cited by the IMF (fragmented platforms, legal uncertainty) and ISDA (custody, capital and margin treatment, cross-border recognition).
- • BlackRock received approval in September for a Hong Kong-dollar digital liquidity fund and has launched tokenized cash products in the US and Europe.
Summary
BlackRock is positioning tokenized money-market funds as a mechanism for institutions to keep capital invested while meeting collateral and transfer needs. By placing fund shares on blockchain networks, the asset manager argues that holdings can move between approved investors without a cash redemption. The underlying assets held by the funds do not change; what changes is how ownership can be transferred, according to the report.
The model is already in use in digital asset markets, where BlackRock's tokenized funds serve as collateral, Dan Maley, who leads the firm's cash business in Asia Pacific, said. Money-market funds are widely used as collateral for trading positions, including initial and variation margin, and tokenization could reduce unnecessary cash conversions.
Extending the practice to traditional finance remains more complex. Banks and other institutions must accept tokens as collateral, existing market infrastructure must accommodate them, and regulation must provide sufficient certainty. Round-the-clock transfers also do not guarantee that investors can redeem for cash at any hour. The International Monetary Fund has cited fragmented platforms, legal uncertainty and difficulties connecting tokenized finance with established infrastructure, while the International Swaps and Derivatives Association has raised concerns about custody and segregation frameworks, capital and margin treatment, cross-border recognition and legal certainty.
BlackRock's BUIDL fund, launched in 2024, has grown to about $2.3 billion. The company has also launched tokenized cash products in the US and Europe and received approval in September for a Hong Kong-dollar digital liquidity fund that accepts traditional and digital cash. Early demand came largely from crypto investors holding stablecoins on-chain seeking yield, said Nikhil Sharma, a director on BlackRock's digital-assets team, and that group also helped drive collateral demand. Sharma said investors want to use established custodians and asset servicers rather than build separate operating models, and he expects adoption of newer products to increase, though institutions will need time to fit the funds into existing workflows.
The model is already in use in digital asset markets, where BlackRock's tokenized funds serve as collateral, Dan Maley, who leads the firm's cash business in Asia Pacific, said. Money-market funds are widely used as collateral for trading positions, including initial and variation margin, and tokenization could reduce unnecessary cash conversions.
Extending the practice to traditional finance remains more complex. Banks and other institutions must accept tokens as collateral, existing market infrastructure must accommodate them, and regulation must provide sufficient certainty. Round-the-clock transfers also do not guarantee that investors can redeem for cash at any hour. The International Monetary Fund has cited fragmented platforms, legal uncertainty and difficulties connecting tokenized finance with established infrastructure, while the International Swaps and Derivatives Association has raised concerns about custody and segregation frameworks, capital and margin treatment, cross-border recognition and legal certainty.
BlackRock's BUIDL fund, launched in 2024, has grown to about $2.3 billion. The company has also launched tokenized cash products in the US and Europe and received approval in September for a Hong Kong-dollar digital liquidity fund that accepts traditional and digital cash. Early demand came largely from crypto investors holding stablecoins on-chain seeking yield, said Nikhil Sharma, a director on BlackRock's digital-assets team, and that group also helped drive collateral demand. Sharma said investors want to use established custodians and asset servicers rather than build separate operating models, and he expects adoption of newer products to increase, though institutions will need time to fit the funds into existing workflows.
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