BlackRock's tokenized money market fund BUIDL has amassed $2.3 billion in assets under management and plans to expand its collateral use cases.

According to Bloomberg, BlackRock, the world’s largest asset manager, is exploring expanding the use cases of tokenized assets from the crypto market to traditional finance, enabling them to serve not only as collateral but also for payments. BlackRock is shifting its focus from issuing stocks, bonds and money market funds on blockchain networks to improving the transfer methods and collateral utility of these assets. Through tokenization, investors can directly transfer their holdings to other investors or use them as transaction collateral without first redeeming them for cash. BlackRock has also been continuously expanding its tokenized product lineup. Its tokenized money market fund BUIDL, launched in 2024, has grown to manage around $2.3 billion in assets. Since then, the firm has rolled out related products in the U.S. and Europe, and in September this year, it received approval to launch a Hong Kong dollar-denominated digital liquidity fund. However, the fact that tokenized assets can be transferred on blockchain networks around the clock does not mean they can be redeemed for cash at any time. The International Monetary Fund (IMF) has noted that fragmentation across different platforms and legal uncertainties are major factors hindering the development of tokenized assets. The International Swaps and Derivatives Association (ISDA) also stated that issues such as custody arrangements, collateral rules and cross-border legal recognition still need to be resolved. Nikhil Sharma, director of BlackRock’s Digital Assets Team, said early investors in tokenized funds were primarily crypto market participants who sought to earn returns while holding stablecoins. He added that the key is to establish bridging mechanisms that allow traditional financial institutions to use tokenized products without building separate systems of their own, and he expects the application scope of such products to expand further over time.