BlackRock has launched tokenized share classes for European money market funds totaling $311 billion, marking its first move into on-chain fund access in Europe.
Summary
- BlackRock has launched on-chain share classes for six European money market funds totaling $311 billion.
- The tokens are created on Ethereum via J.P. Morgan's Kinexys, while the transfer agent maintains the shareholder register.
- Earlier this week, BlackRock also introduced tokenized money market funds on Solana, Ethereum, and Tempo.
In a significant move towards modernizing fund access, BlackRock has introduced tokenized share classes for a selection of European money market funds, which collectively hold $311 billion in assets. This initiative marks the firm's first entry into on-chain fund access in Europe.
The newly launched share classes are part of the BlackRock Institutional Cash Series and include strategies in euro, sterling, and U.S. dollars, available in both accumulating and distributing formats. Tokens are minted on the Ethereum blockchain through Kinexys, J.P. Morgan's blockchain platform, which manages the minting and burning of tokens and acts as the intermediary for transactions with the traditional shareholder register.
Each token represents a share in the corresponding fund, with the official shareholder register still being overseen by the fund's transfer agent. Smart contracts enable approved investors to transfer holdings seamlessly, ensuring 24/7 peer-to-peer transaction capabilities and near real-time tracking, as stated by BlackRock.
Beccy Milchem, Global Head of Cash Distribution at BlackRock, highlighted that this launch represents a significant transformation in investor access and cash management, while also enhancing capital markets infrastructure. Kara Kennedy, from Kinexys, noted that tokenization has moved from theory to reality, with BlackRock looking to leverage this new structure in areas such as corporate treasury management and wealth distribution.
The tokenized funds are designed for professional and qualified clients, available in several jurisdictions including the UK, Germany, and Singapore. They are categorized as public debt constant net asset value and low volatility NAV money market funds, adhering to the European UCITS regulatory framework. Hannah Winter, BlackRock's Head of Digital Cash, assured that the tokenized funds maintain the same standards of capital preservation and liquidity as traditional funds.
Further Developments in BlackRock's Tokenization Efforts
This development follows BlackRock's recent introduction of tokenized money market funds on Solana, Ethereum, and Stripe's Tempo, with Securitize as the transfer agent, aimed at stablecoin reserve management. The firm has been preparing for this tokenization strategy since launching BUIDL, a tokenized fund on Ethereum in March 2024, which has now expanded across eight networks and manages over $2.6 billion in assets. Executives have described this tokenization effort as a pivotal evolution in market infrastructure.
