Summary
- BlackRock introduces on-chain share classes for six European money market funds totaling $311 billion.
- Tokens are created on Ethereum through J.P. Morgan's Kinexys, while the fund's transfer agent retains the shareholder register.
- Additionally, BlackRock unveiled tokenized money market funds on Solana, Ethereum, and Tempo earlier this week.
BlackRock has rolled out tokenized share classes for a collection of European money market funds, aggregating $311 billion, marking its inaugural foray into on-chain fund access in Europe.
The new share classes encompass six funds within the BlackRock Institutional Cash Series, offering euro, sterling, and U.S. dollar strategies in both distributing and accumulating formats. Tokens are minted on Ethereum via Kinexys, J.P. Morgan's blockchain division, which oversees the minting, burning, and serves as the intermediary between on-chain transactions and the traditional shareholder register.
Each token corresponds to a share of the underlying fund, while the official shareholder register continues to be managed by the fund's transfer agent. Smart contracts facilitate the transfer of holdings among approved investor wallets, providing 24/7 peer-to-peer transfer capabilities and near real-time visibility, according to BlackRock.
Beccy Milchem, Global Head of Cash Distribution and Head of the International Cash Management business at BlackRock, stated, “Today’s launches signify a significant evolution in how investors access and manage cash, while also modernizing capital markets infrastructure.”
Kara Kennedy, global head of market development at Kinexys, remarked that, "Tokenization has progressed from concept to execution," adding that BlackRock anticipates applications in corporate treasury management, digital collateral, and bank and wealth distribution channels for this new structure.
The share classes target professional and qualified clients instead of retail investors, and are accessible in jurisdictions including Bermuda, Estonia, France, Germany, Ireland, Lithuania, Luxembourg, Malta, the Netherlands, Singapore, Spain, Sweden, and the UK.
The underlying funds are characterized as public debt constant net asset value and low volatility NAV money market funds, regulated under the European UCITS framework. Hannah Winter, BlackRock's Head of Digital Cash, emphasized that the tokenized versions uphold the same standards for capital preservation, liquidity, and risk management as their traditional counterparts.
Advancements in BlackRock's Tokenization Strategy
This launch follows the announcement of BlackRock's issuance of tokenized money market funds that track ownership on Solana, Ethereum, and Stripe's Tempo, with Securitize serving as the transfer agent, aimed at stablecoin reserve management.
The asset management firm has been preparing for this initiative since BUIDL, the tokenized fund introduced on Ethereum in March 2024 with a minimum investment of $5 million, which has since expanded across eight networks. Executives Larry Fink and Rob Goldstein have described tokenization as "the next major evolution in market infrastructure.”
BUIDL now oversees assets exceeding $2.6 billion. The launch of the ICS share classes occurs against a backdrop of $311 billion in existing assets, although BlackRock has not disclosed how much of that is anticipated to transition on-chain.