Investors can now use the tokenized fund as off-exchange collateral, with plans for a new share class to launch on a blockchain set up by the digital asset exchange giant.
BlackRock Inc.'s tokenized fund will be accepted as collateral on Binance Holdings Ltd., in a step that broadens access of the asset manager's blockchain-linked products on the largest crypto trading platform and marks Wall Street's deepening ties with the digital-asset world.
The $2.5 billion BlackRock USD Institutional Digital Liquidity Fund (ticker BUIDL) can now be used as off-exchange collateral for trading on the digital-assets platform, one of only three tokenized products available to be utilized in that capacity, according to Binance's website.
BUIDL is also launching a new share class on BNB Chain, a blockchain founded by Binance, according to a Friday press release that laid out the developments.
The move signals a broader shift in the architecture of digital-asset markets, as major Wall Street players begin to reshape how risk and liquidity flow through the crypto ecosystem.
For years, stablecoins like Tether and USD Coin, served as the dominant form of collateral for crypto derivatives trade. But tokenized money-market funds offer access to real-world yields -- something stablecoins don't inherently provide.
BUIDL debuted last year as BlackRock's first tokenized fund issued on a public blockchain for use by qualified investors. It's tokenized by the firm Securitize and is the largest fund in its class, according to RWA.xyz. With such products now being accepted on major crypto exchanges, traditional financial instruments are starting to compete directly with stablecoins at the core of crypto's collateral plumbing.
"This milestone highlights our continued focus on transforming tokenization from concept to practical market utility," Robbie Mitchnick, BlackRock's global head of digital assets said in a press release. "We're helping bring foundational elements of traditional finance into the onchain finance arena."
BlackRock and Securitize were in talks last year with the largest crypto exchanges, including Binance, about using BlackRock's BUIDL tokens as collateral for derivatives trades. BUIDL is already used by FalconX and other crypto prime brokers as collateral among their clients.
Institutional traders have expressed increased interest to use tokenized money-market funds as alternatives to stablecoins. Still, the tokenized world remains comparatively small, according to JPMorgan Chase & Co. Its total value sits around $36 billion, RWA.xyz data show. The bank says that the majority of that activity is being driven by crypto-native firms rather than Wall Street incumbents.
The latest development comes on the heels of Changpeng Zhao, the co-founder of Binance, receiving a pardon from Donald Trump. It follows a period of legal and regulatory turbulence for Binance which pleaded guilty to US anti-money laundering and sanctions violations as part of a $4.3 billion settlement.