BlackRock, the world’s largest asset manager, has unveiled its inaugural tokenized investment fund, the BlackRock USD Institutional Digital Liquidity Fund (BUIDL), signaling a significant stride toward integrating blockchain technology into traditional finance.
According to its official announcement, the fund, residing on the Ethereum network, is designed to offer qualified investors U.S. dollar yields accessible through Securitize Markets, LLC.
Robert Mitchnick, BlackRock’s Head of Digital Assets, emphasized the fund’s commitment to addressing client needs in the digital realm. “This marks the latest evolution of our digital assets strategy. Our focus is on crafting solutions in the digital assets arena that effectively address genuine client concerns, and we are enthusiastic about our collaboration with Securitize,” he commented.
BUIDL provides investors with a stable token value pegged at $1, disbursing dividends directly to their wallets on a monthly basis. Its investment portfolio concentrates on cash, U.S. Treasury bills, and repurchase agreements, ensuring attractive yields for token holders within the blockchain ecosystem. Additionally, the fund introduces round-the-clock token transfers among pre-approved investors and offers flexible custody alternatives.
Key players in the crypto infrastructure sphere such as Anchorage Digital Bank NA, BitGo, Coinbase (NASDAQ: COIN), and Fireblocks are among the initial participants supporting BUIDL. BlackRock has enlisted Bank of New York Mellon for asset custody and fund management, while Securitize will oversee tokenization and fund operations.
Furthermore, BlackRock has made an investment in crypto infrastructure specialist Securitize, appointing Joseph Chalom, Global Head of Strategic Ecosystem Partnerships at BlackRock, to Securitize’s Board of Directors.
The issuance of token shares for the fund will adhere to specific U.S. securities regulations, with an initial investment threshold set at $5 million. PricewaterhouseCoopers LLP will conduct audits of fund operations to ensure regulatory compliance.
Carlos Domingo, Co-founder and CEO of Securitize, hailed the transformative potential of securities tokenization in capital markets. “Today’s announcement underscores the increasing accessibility of traditional financial products through digitization. Securitize is honored to serve as BlackRock’s transfer agent, tokenization platform, and placement agent of choice in the digitization and broadening of access to its investment offerings,” he remarked.
Earlier this month, the U.S. Securities and Exchange Commission (SEC) delayed its decision on BlackRock’s proposal for a spot Ethereum exchange-traded fund (ETF). This setback represented another hurdle for the asset manager’s plans to launch the iShares Ethereum Trust, slated for listing on the Nasdaq pending approval.
