BlackRock, the world’s largest asset management firm, has taken a significant step into the world of digital assets with the launch of its first tokenized fund, BUIDL, on the Ethereum network.
The BlackRock USD Institutional Digital Liquidity Fund, as it is formally known, aims to provide qualified investors with the opportunity to earn U.S. dollar yields by subscribing to the fund through Securitize Markets, LLC.
TLDR
- BlackRock has launched its first tokenized fund, BUIDL, on the Ethereum network.
- The fund aims to provide qualified investors with the opportunity to earn U.S. dollar yields.
- BUIDL invests in cash, U.S. Treasury bills, and repurchase agreements, offering a stable value of $1 per token.
- BlackRock has made a strategic investment in Securitize, a tokenization platform and transfer agent.
- The fund’s ecosystem includes Anchorage Digital Bank NA, BitGo, Coinbase, and Fireblocks, among others.
The launch of BUIDL is a major milestone in BlackRock’s digital asset strategy, which focuses on developing solutions that address real problems for clients in the digital assets space.
By tokenizing the fund, BlackRock aims to offer investors several benefits, including the issuance and trading of ownership on a blockchain, expanded access to on-chain offerings, instantaneous and transparent settlement, and the ability to transfer tokens across platforms.
BUIDL seeks to maintain a stable value of $1 per token and pays daily accrued dividends directly to investors’ wallets as new tokens each month. The fund invests entirely in cash, U.S. Treasury bills, and repurchase agreements, allowing investors to earn yield while holding the token on the blockchain. Investors can transfer their tokens 24/7/365 to other pre-approved investors and have flexible custody options.
To facilitate the launch of BUIDL, BlackRock has partnered with several key players in the crypto industry. Bank of New York Mellon will serve as the custodian of the fund’s assets and its administrator, enabling interoperability between digital and traditional markets. Securitize, a tokenization platform and transfer agent, will manage the tokenized shares and report on fund subscriptions, redemptions, and distributions. Securitize Markets will act as the placement agent, making the fund available to eligible investors.
In addition to the launch of BUIDL, BlackRock has made a strategic investment in Securitize, demonstrating its commitment to the growth and development of the digital assets infrastructure. As part of the investment, Joseph Chalom, BlackRock’s Global Head of Strategic Ecosystem Partnerships, has been appointed to Securitize’s Board of Directors.
The initial ecosystem participants in BUIDL include Anchorage Digital Bank NA, BitGo, Coinbase, and Fireblocks, among other market participants and infrastructure providers in the crypto industry. PricewaterhouseCoopers LLP has been appointed as the fund’s auditor for the period ending December 31, 2024.
The launch of BUIDL and BlackRock’s strategic investment in Securitize signal a growing interest from traditional finance giants in the tokenization of real-world assets.
As digital assets and traditional finance become increasingly intertwined, the tokenization of investments such as bonds and funds is becoming a fast-growing use case for blockchains.
BlackRock’s move into this space is likely to inspire other major players to explore the potential of tokenization.
