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Global investment manager BlackRock announced on Wednesday the launch of its first tokenized fund powered by the Ethereum blockchain. The BlackRock USD Institutional Digital Liquidity Fund, also known as BUIDL, is designed to offer qualified investors a new way to earn US dollar yields through subscriptions via Securitize Markets, LLC.
According to on-chain data, BUIDL was initially seeded with $100 million USDC after BlackRock filed with the US Securities and Exchange Commission (SEC) to launch it on March 15.
Commenting on the launch, Robert Mitchnick, BlackRock’s Head of Digital Assets, said that it is a critical milestone in the company’s digital assets strategy.
“This is the latest progression of our digital assets strategy,” Mitchnick stated. “We are focused on developing solutions in the digital assets space that help solve real problems for our clients, and we are excited to work with Securitize.”
The tokenization of BUIDL allows for the issuance and trading of fund shares on the blockchain, offering benefits such as immediate settlement and enhanced liquidity, thus broadening the appeal to a more global investor base, as noted in the press release. BNY Mellon will facilitate the fund’s interoperability between digital and traditional financial markets.
Carlos Domingo, co-founder and CEO of Securitize, lauded the initiative. He said:
“Tokenization of securities could fundamentally transform capital markets. Today’s news demonstrates that traditional financial products are being made more accessible through digitization.”
The fund targets a stable token value of $1, distributing dividends as new tokens monthly. Its assets are entirely allocated to cash, US Treasury bills, and repurchase agreements. BlackRock Financial Management, Inc. will manage the fund, with BNY Mellon acting as custodian and administrator. Securitize will oversee tokenization and act as the transfer agent. The fund’s initial minimum investment is set at $5 million, and it will issue shares under specific SEC rules.
The fund’s ecosystem includes key players, including Anchorage Digital Bank NA, BitGo, Coinbase, and Fireblocks, alongside BlackRock Financial Management, Inc. as the investment manager, and Bank of New York Mellon as custodian and administrator. PricewaterhouseCoopers LLP has been appointed as auditor.
Furthermore, BlackRock’s strategic investment in Securitize signifies a deep commitment to exploring digital asset solutions, with Joseph Chalom, BlackRock’s Global Head of Strategic Ecosystem Partnerships, joining Securitize’s Board of Directors.
For years, financial institutions have been exploring ways to harness blockchain technology to achieve tokenization of real-world assets. BlackRock’s CEO, Larry Fink, is not part of those skeptical; he has repeatedly expressed his bullish outlook on the future of tokenization.
In a January interview with CNBC, Fink outlined a two-step vision for the future of financial markets. The first step, he said, has been realized with the launch of Bitcoin exchange-traded funds (ETFs). The second step, according to Fink, is “the token digitalization of the assets.” He said that ETFs are key steps toward tokenization.
BlackRock is currently pursuing regulatory approval for its spot Ethereum ETF filing, alongside other asset management giants like ARK Invest and VanEck. The SEC has a deadline of May 23 to make a decision on these applications.
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