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      BlackRock Proposes Tokenized Money Market Funds as Instant Collateral at TOKEN2049

      At the TOKEN2049 conference in Singapore, BlackRock's Director of Digital Assets, Nikhil Sharma, presented a proposal for tokenized money market funds (tMMFs) that could serve as instant collateral without the delays associated with traditional cash settlements. This innovation aims to streamline the collateral process by allowing fund shares to be transferred directly on-chain, eliminating the need for redemption and the multi-day wait for cash to settle.

      Sharma explained that in the conventional model, institutions must redeem money market fund shares for cash before using that cash as collateral, which can leave capital idle for days. The tokenized approach allows the holder to maintain their position in the fund while transferring the asset to a counterparty, who can then utilize it without waiting for cash settlement. This method not only enhances efficiency but also allows capital to remain productive during the collateralization process.

      BlackRock has been actively expanding its tokenization efforts, having launched two new tokenized funds, BSTBL and BRSRV, on August 3, 2026. These funds are designed to meet eligibility requirements as reserve assets under the U.S. GENIUS Act, which governs stablecoins. The firm has also introduced tokenized share classes for its European UCITS money market funds, which collectively manage approximately $311 billion in assets as of June 30, 2026.

      The implications of this development are significant for both institutional investors and the cryptocurrency market. By providing a regulated, yield-bearing alternative to idle stablecoins, tokenized money market fund shares could enhance liquidity and efficiency across various trading venues. However, the success of this initiative will depend on widespread acceptance among exchanges and counterparties, as well as the establishment of robust legal and operational frameworks.

      © 2026 KLEA News. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

      Source: KLEA News

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