BlackRock wants tokenized funds to back traditional Wall Street trades

BlackRock has identified the use of tokenized investment funds as trading collateral in traditional financial markets as a potential next application for blockchain technology, building on existing arrangements that already allow institutional crypto traders to pledge tokenized fund holdings. Summary BlackRock sees tokenized money market funds serving as collateral for trades across traditional financial markets. Its BUIDL fund already supports institutional collateral arrangements through Binance, providing an existing operational example. BlackRock’s European tokenization rollout covers fund ranges managing USD 311 billion, not fully tokenized assets. Ondo introduced three portfolios using BlackRock investment strategies, making diversified exposure available through digital tokens. Traditional market adoption still depends on custody, clearing and collateral rules that participating institutions must satisfy. According to an October 19 Bloomberg report, Dan Maley, BlackRock’s head of cash management for Asia Pacific, said the firm’s tokenized funds are already being used as collateral in digital-asset markets. Extending that capability into conventional financial markets remains...