BlackRock Proposed Tokenized Funds as Collateral

The firm seeks to allow institutions to use digital asset shares as collateral to improve trade efficiency.

Updated on Oct. 7, 2026 in Investing

Isometric editorial illustration of geometric blocks stacked on a steel platform, representing structured financial collateral. — BlackRock has proposed using its tokenized money market fund shares as direct collateral for institutional trades, aiming to reduce settlement times. AI Illustration. Upload story photo >

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Would you use tokenized fund shares to secure trades instead of traditional cash collateral?

BlackRock has proposed using its tokenized money market fund shares as direct collateral for institutional trades. By utilizing blockchain transfers, the firm aims to allow capital to remain productive while eliminating traditional multi-day cash settlement wait times.

Why it matters

Replacing manual, multi-day settlement cycles with on-chain transfers reduces the significant capital buffers currently required by financial institutions. This shift helps investors keep assets invested and earning returns even while securing ongoing trades.

BlackRock's BUIDL tokenized fund currently manages approximately $2.5 billion in assets. Meanwhile, the firm's European UCITS money market funds held a total of $311 billion in assets as of June 30, 2026.

The players

BlackRock

BlackRock is a global investment management corporation that serves institutional and retail clients through a range of investment products and services.

Nikhil Sharma

Nikhil Sharma serves as the Director of Digital Assets at BlackRock, where he leads the firm's initiatives involving blockchain technology and tokenization.

J.P. Morgan

J.P. Morgan is a prominent global financial services firm that provides investment banking and financial transaction infrastructure to corporations and institutions.

The details

BlackRock is leveraging J.P. Morgan's Kinexys platform to enable 24/7 peer-to-peer transfers of tokenized shares. For this collateral model to function, the firm must coordinate with third-party exchanges and clearinghouses to standardize acceptance of these digital assets.

March 2024: BlackRock introduced the BUIDL tokenized fund.
December 2025: Nikhil Sharma became the Director of Digital Assets.
June 30, 2026: The firm measured $311 billion in UCITS money market assets.
August 3, 2026: BlackRock launched the BSTBL and BRSRV tokenized funds.
October 7, 2026: The initiative was discussed during the TOKEN2049 event.

Market Dynamics

This move represents a departure from traditional financial settlement, as the industry begins to integrate blockchain into the plumbing of global markets. By pushing for tokenized collateral, the firm is positioning itself to lead the institutional transition away from legacy settlement infrastructure.

For institutional and retail investors, this transition could eventually lead to faster trade settlements and higher capital efficiency within digital portfolios. However, the immediate impact remains limited to large-scale institutional participants who must first establish collateral acceptance agreements.

The takeaway

The move underscores a growing industry effort to migrate traditional asset management into high-speed digital environments. Investors should monitor whether major clearinghouses adopt these standards, as broader acceptance could signal a standard shift in how institutional collateral is managed.