Stories
BlackRock Sees Tokenized Funds Reshaping Wall Street Plumbing
- •BlackRock is pushing beyond simple digital asset creation to transform how financial assets move through the traditional system.
- •Tokenized funds like BlackRock's BUIDL are increasingly used as collateral, allowing assets to be transferred around the clock without prior redemption.
- •Integration into traditional finance faces hurdles including fragmented platforms, legal uncertainty, and the need for regulatory clarity.
- •Industry bodies like ISDA emphasize that custody frameworks, cross-border recognition, and operational standards must still be addressed.
- •BlackRock's BUIDL fund has grown to about $2.3 billion since its 2024 launch as the firm expands its digital liquidity offerings globally.
Key Questions Answered
BlackRock's first tokenized money-market fund, BUIDL, has grown to about $2.3 billion since it was launched in 2024, making it one of the largest products of its kind.
According to bodies like the International Monetary Fund and ISDA, tokenized finance faces hurdles including fragmented platforms, legal uncertainty, difficulties connecting with existing financial infrastructure, and questions regarding custody, capital treatment, and cross-border recognition.
Tokenization changes the rails on which asset ownership moves rather than altering what a money-market fund owns. This allows tokenized funds to serve as collateral in the digital-asset market and potentially streamline transfers without requiring prior redemption for cash, keeping assets invested longer.
