(Kitco News) – BlackRock continues to be one of the biggest drivers of interest in the digital asset ecosystem as the world’s largest asset manager has followed up the launch of a spot Bitcoin (BTC) exchange-traded fund (ETF) with the launch of its first tokenized fund issued on a public blockchain, the BlackRock USD Institutional Digital Liquidity Fund (BUIDL).
The new fund will “provide qualified investors with the opportunity to earn U.S. dollar yields by subscribing to the Fund through Securitize Markets, LLC,” a press release from BlackRock and Securitize said. It will be tokenized on the Ethereum (ETH) blockchain, with BUIDL designed as an ERC-20 token.
“This is the latest progression of our digital assets strategy,” said Robert Mitchnick, BlackRock’s Head of Digital Assets. “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.”
“Securitize will act as a transfer agent and tokenization platform, managing the tokenized shares and reporting on Fund subscriptions, redemptions, and distributions,” the release said. “Securitize Markets will act as placement agent, making the Fund available to eligible investors.”
According to the Form D filing BlackRock submitted to the Securities and Exchange Commission (SEC), the asset manager created the fund in 2023 but has yet to launch it. The fund was created under the jurisdiction of the British Virgin Islands and will have a $100,000 minimum investment.
Tokenization remains a key focus of BlackRock’s digital asset strategy. Following the launch of the iShares Bitcoin Trust (IBIT), BlackRock CEO Larry Fink said, “We believe the next step going forward will be the tokenization of financial assets, and that means every stock, every bond […] will be on one general ledger.”
“Tokenization of securities could fundamentally transform capital markets,” said Securitize co-founder and CEO Carlos Domingo. This development “demonstrates that traditional financial products are being made more accessible through digitization.”
BlackRock said BUIDL “will offer investors important benefits by enabling the issuance and trading of ownership on a blockchain, expanding investor access to on-chain offerings, providing instantaneous and transparent settlement, and allowing for transfers across platforms. BNY Mellon will enable interoperability for the Fund between digital and traditional markets.”
The new token is designed to “offer a stable value of $1 per token and pays daily accrued dividends directly to investors' wallets as new tokens each month,” the release said. “The Fund invests 100% of its total assets in cash, U.S. Treasury bills, and repurchase agreements, allowing investors to earn yield while holding the token on the blockchain.”
BUIDL Investors will be able to transfer their tokens to other pre-approved investors at any time, BlackRock said. Fund participants will also have flexible custody options, allowing them to choose how to hold their tokens.
Some of the other ecosystem participants that have backed the launch of BUIDL include Anchorage Digital Bank NA, BitGo, Coinbase, and Fireblocks, “among other market participants and infrastructure providers in the crypto industry,” the release said. “BlackRock Financial Management, Inc., will be the investment manager of the Fund and Bank of New York Mellon will serve as the custodian of the Fund’s assets and its administrator.”
In true crypto community form, multiple anonymous donors have sent various tokens and NFTs to the Funds public Ethereum address after several onchain sleuths managed to determine one of its supposed wallets.
Etherscan data shows a test deposit of $200 USDC was made on March 5, followed by another $10 test deposit on March 15 – one day after the firm filed the paperwork for BUIDL. After that deposit was confirmed, a transfer of $100 million USDC was made.
Since then, multiple crypto holders have sent at least 63 coins and 39 NFTs to the address, including 10,000 Realio Network (RIO) tokens worth approximately $11,600. Interestingly, the RIO token is a real-world asset tokenization coin that has pumped 47% since the token was transferred to BlackRock, according to data provided by CoinMarketCap.
Larry: "wait a minute- you're telling me our fund already made $42K?? how can that be possible? we just deployed yesterday!"
Staffer: "well sir, it appears that big-dick-fink.eth and several others have been sending tokens to our wallet. i'm having accounting catalog it all now" pic.twitter.com/kqeXOWPgBv— DCinvestor (@iamDCinvestor) March 21, 2024
