BlackRock CEO Larry Fink
Asset management giant BlackRock (BLK) officially unveiled its tokenized asset fund on the Ethereum network on Wednesday.
The BlackRock USD Institutional Digital Liquidity Fund is represented by the blockchain-based BUIDL token, is fully backed by cash, U.S. Treasury bills, and repurchase agreements, and will provide yield paid out via blockchain rails every day to token holders, according to a press release.
Securitize will act as a transfer agent and tokenization platform, while BNY Mellon is the custodian of the fund’s assets, BlackRock said. Anchorage Digital Bank NA, BitGo, Coinbase, and Fireblocks also participate in the fund’s ecosystem.
BlackRock also initiated a “strategic investment” in Securitize, according to the press release. However, the specific terms of this deal have not been revealed.
Robert Mitchnick, who heads digital assets at BlackRock, mentioned that this development forms a part of their ongoing digital assets strategy. “We are targeting the invention of digital asset solutions that tackle real-world issues for our customers. We are thrilled to collaborate with Securitize,” he added.
The announcement was made shortly after a regulatory document revealed that BlackRock has incorporated a fund with Securitize. This led to speculations regarding a tokenized fund, as observers referred to blockchain transactions to initiate the vehicle, as reported by CoinDesk on Tuesday.
BlackRock joins a list of traditional finance powerhouses that have ventured into the field of tokenization, including Citi, Franklin Templeton, and JPMorgan. The creation of blockchain-based tokens that represent traditional investment forms like bonds and funds – a process known as tokenization of real-world assets (RWA) – is seeing rapid growth. This is because digital assets and traditional finance (TradFi) are becoming increasingly integrated. For example, Tokenized U.S. Treasuries have grown to $730 million from an initial $100 million in 2023, as cryptocurrency companies look to earn consistent yields by parking their on-chain funds.
BlackRock CEO Larry Fink mentioned in a CNBC interview earlier this year that the firm’s spot BTC ETF was “paving the path towards tokenization”.
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