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The tokenized fund, tagged the BlackRock USD Institutional Digital Liquidity Fund (BUIDL), is a major step in the evolution of digital assets and their integration into traditional finance.
BlackRock, the world’s largest asset manager with over $8 trillion in assets under management, has launched its first tokenized fund on a public blockchain, built in collaboration with Securitize, a company that specializes in digital asset securities. This move further showcases the asset manager’s embrace of blockchain technology and its potential to revolutionize the investment industry.
Securitize is proud to announce we have partnered with @BlackRock. Together, we’re launching BlackRock USD Institutional Digital Liquidity Fund (BUIDL).
BUIDL will provide investors with the opportunity to earn U.S. dollar yields by subscribing to the fund with Securitize… pic.twitter.com/nDsNehOXJU
— Securitize (@Securitize) March 20, 2024
The tokenized fund, tagged the BlackRock USD Institutional Digital Liquidity Fund (BUIDL), is a major step in the evolution of digital assets and their integration into traditional finance. By leveraging the Ethereum blockchain, the asset management company aims to provide investors with a secure, transparent, and efficient investment vehicle. BlackRock’s Head of Digital Assets, Robert Mitchnick, commenting about the development, stated:
“This is the latest progression of our digital asset strategy. We are focused on developing solutions in the digital asset space that help solve real problems for our clients, and we are excited to work with Securitize.”
BUIDL is pegged to the US dollar, with each token representing $1 in value. Investors will receive daily accrued dividends directly in the form of new BUIDL tokens, which will be deposited into their digital wallets on a monthly basis. This distribution method leverages blockchain technology to streamline dividend payments and enhance the investor experience.
While the launch has taken place, the token fund is yet to be approved or registered with the Securities Exchange Commission under the Securities Act of 1933. Therefore, pending registration, the token cannot be sold within the United States.
Strategic Collaboration and Industry Partnerships
To kickstart the fund, BlackRock has already issued $100 million worth of USD Coin (USDC), a stablecoin pegged to the US dollar, on the Ethereum blockchain to a wallet linked with a Securitize deployer. This initial investment will be a good boost for the newly launched tokenized fund.
BlackRock Financial Management will serve as the manager for the fund, overseeing its investment activities, while Bank of New York Mellon will be in charge of safeguarding the fund’s assets. Securitize will handle the transfer and tokenization platform, managing the tokenized shares and reporting on fund activities, while Securitize Markets will act as the placement agent, making the fund available to eligible investors.
Expanding Digital Asset Footprint
BlackRock’s recent move is not the first time it has shown interest in digital assets. The company has also launched a Spot Bitcoin ETF called the iShares Bitcoin Trust (IBIT), and it has quickly gained over $1 billion in investments. They have also filed for approval with the US Securities and Exchange Commission (SEC) for an iShares Ethereum Trust. The CEO of the asset management company, Larry Fink, has expressed interest in digital assets, particularly the ETH ETF, mentioning earlier this year that he sees value in the asset.
