BlackRock’s BUIDL tokenized fund grows as Wall Street experiments with tokenized collateral

BlackRock is pushing deeper into tokenized finance as market participants race to move traditional assets and trading infrastructure onto blockchain-based systems. According to a market report, the asset manager’s BUIDL offering, a tokenized money-market fund, has grown to about US$2.3 billion in assets since its 2024 launch.

The same report frames BUIDL’s expansion as part of a broader push among financial firms to make tokenized assets more functional within capital markets. One of the next steps BlackRock is reportedly investigating is whether shares in tokenized funds can be used as collateral, a role that would connect tokenized instruments to day-to-day funding and trading workflows.

Collateral is a central mechanism in finance. It is the pledged asset that helps secure obligations, such as loans and derivatives transactions, and it can be posted and replaced as positions change. Moving collateral processes onto token rails could, in theory, reduce settlement frictions and speed up how quickly counterparties can meet margin and funding requirements. BlackRock’s reported inquiry suggests it wants to understand whether tokenized fund shares can play that operational role.

BlackRock is also doing what the broader industry tends to do at this stage of innovation, which is pairing product growth with experimentation around market plumbing. In this case, the reported focus is not just on issuing tokenized fund exposure, but on testing how that exposure might be accepted and utilized inside the collateral ecosystem.

The development sits within a sector trend that has accelerated over the past two years: tokenization is increasingly viewed by large asset managers, banks, and market infrastructure providers as a way to modernize settlement, increase programmability, and potentially improve liquidity for certain asset classes. Money-market funds, in particular, are often cited as candidates because they are designed to maintain stable value, which can simplify risk management compared with more volatile assets.

Even with the reported growth, key details remain unclear from the publicly available report. The post does not describe the technical or legal standards BlackRock would require for tokenized shares to be eligible collateral, nor does it specify which counterparties, trading venues, or counterpart agreements would be involved. It also does not provide confirmed performance metrics beyond the approximate asset figure, such as issuance volumes, redemption rates, or average time to settlement.

For now, the most concrete takeaway is that BlackRock’s tokenized-fund experiment is scaling, at least as measured by reported assets, while the firm looks toward a second phase that could connect tokenized securities to collateral and funding operations. If that effort advances from exploration to implementation, it could change how quickly market participants can mobilize tokenized holdings when they need them most.

What to watch next is whether BlackRock provides additional disclosures about its collateral-related work, including any pilots, partner institutions, regulatory touchpoints, or operational benchmarks. Separately, market participants will likely look for indicates on whether other large firms follow similar collateral strategies, and whether infrastructure providers support tokenized collateral in ways that reduce friction across different platforms.