BlackRock Eyes Traditional Wall Street Collateral Role for $2.3B Tokenized Fund

BlackRock $BLK is working to expand the use of its tokenized money-market funds from digital-asset markets into traditional Wall Street collateral and settlement systems, while Coinbase tokenized stocks on Base have also gained traction as on-chain collateral. The firm's first tokenized money-market fund, BUIDL, has reached about $2.3B in assets since launching in 2024, alongside subsequent tokenized cash product rollouts in the US and Europe and a September approval for a Hong Kong-dollar digital liquidity fund. BlackRock executives say tokenized shares can transfer between approved investors around the clock without requiring cash redemptions first, potentially allowing institutions to keep collateral invested longer for initial and variation margin. However, the International Monetary Fund and the International Swaps and Derivatives Association warn that fragmented platforms, custody rules, capital and margin treatment, and legal uncertainty still block widespread integration with legacy financial infrastructure. "Questions relating to custody and segregation frameworks, capital and margin treatment, cross-border recognition and legal certainty must be addressed with industry standards and regulatory clarity." — Scott O'Malia, Chief Executive at ISDA.