Real-world asset tokenization platform Ondo Finance's governance token (ONDO) surged 8% following a report about asset manager BlackRock's initiative to list its tokenized money market fund, BUIDL, as collateral for derivatives trading on major exchanges, including Binance, Deribit, and OKX.

According to Bloomberg, BlackRock and its issuance partner Securitize are negotiating with these crypto giants to facilitate the use of BUIDL as margin for trading derivatives. Ondo's token jumped to 79 cents post-report, marking nearly a 9% rise over the prior 24-hour period, significantly outperforming the broader CoinDesk 20 Index's modest gain of 2.2%.

The prospect of using tokenized money market funds as collateral allows traders to earn a yield on their investments while utilizing them for margin trading instead of traditional stablecoins. This innovation represents a growing trend within the crypto space, where institutions are beginning to recognize the value of using such assets in financial transactions.

BUIDL is currently the largest tokenized asset on the market, with over $550 million in assets and a fixed price of $1. It presents a unique opportunity for institutional investors and platforms seeking to optimize liquidity management without losing yield. State Street's Donna Milrod emphasized the potential of collateral tokens in traditional finance, suggesting they could alleviate liquidity pressures during financial crises.