BlackRock Pitches Tokenized Money Market Funds as Instant Collateral
BlackRock’s digital assets director Nikhil Sharma is advocating for the use of tokenized money market funds as direct collateral to eliminate multi-day settlement delays.
Nikhil Sharma, BlackRock’s Director of Digital Assets, is highlighting the potential for tokenized money market funds to serve as instant collateral. By moving these assets on-chain, institutions could bypass the traditional redemption process that currently requires waiting days for cash to settle.
Under the current system, institutions must redeem fund shares for cash before using them as collateral, leaving capital idle during the settlement cycle. Sharma suggests that by keeping fund shares in tokenized form, they can be transferred directly to a counterparty. This allows the holder to continue earning yield while providing the counterparty with a usable asset.
BlackRock has been expanding its tokenization efforts since Sharma took his role in December 2025. In August 2026, the firm launched two tokenized funds, BSTBL and BRSRV, with the latter designed specifically for stablecoin reserves and digital-native institutions. These products follow the March 2024 launch of BUIDL, which currently manages approximately $2.5 billion in assets.
The firm is also working with J.P. Morgan’s Kinexys platform to enable 24/7 peer-to-peer transfers. Additionally, BlackRock has introduced tokenized share classes for its European UCITS money market funds, which held $311 billion in assets under management as of June 30, 2026.
For crypto markets, this development offers a yield-bearing, regulated alternative to holding idle stablecoins for exchanges, lenders, and derivatives venues. If BSTBL and BRSRV become eligible as reserve assets under the US GENIUS Act, they could provide a compliant home for stablecoin backing assets.
While firms like Fidelity and Invesco are pursuing similar initiatives, widespread adoption remains dependent on the willingness of exchanges and clearinghouses to accept these tokens. Legal frameworks, custody arrangements, and operational performance during periods of market stress are expected to be tested as the industry moves toward this model.
