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BlackRock, the world's largest asset manager, today launched its first tokenized investment fund, the BlackRock USD Institutional Digital Liquidity Fund (BUIDL).
According to its official statement, the move signals a major shift towards the integration of blockchain technology into traditional finance. The fund, built on the network, aims to provide qualified investors with US dollar returns accessible through Securitize Markets, LLC.
Robert Mitchnick, head of digital assets at BlackRock, said the fund is focused on solving clients' problems in the digital space. “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,” he added.
BUIDL offers a stable token value set at $1 and distributes dividends directly to investors' wallets on a monthly basis. It focuses on investments in cash, US Treasury bills and repurchase agreements, guaranteeing returns for token holders on the blockchain. The fund introduces 24/7 token transfers between pre-approved investors, along with flexible custody options.
Prominent crypto infrastructure providers such as Anchorage Digital Bank NA, BitGo, Coinbase (NASDAQ 🙂 and Fireblocks are among the first participants to support BUIDL. BlackRock has chosen Bank of New York Mellon for asset custody and fund management, while Securitize will manage tokenization and fund operations.
Additionally, BlackRock has invested in crypto infrastructure specialist Securitize and appointed Joseph Chalom, BlackRock's global head of strategic ecosystem partnerships, to Securitize's board of directors.
The fund's token shares will be issued under specific US securities regulations, with an initial investment threshold of $5 million. PricewaterhouseCoopers LLP will audit the fund's operations to ensure compliance with relevant regulations.
“Securities tokenization could fundamentally transform capital markets. Today's news shows that traditional financial products are becoming more accessible thanks to digitalization. “Securitize is proud to be BlackRock’s preferred transfer agent, tokenization platform and placement agent to digitize and expand access to its investment products,” said Securitize Co-Founder and CEO Carlos Domingo.
Earlier this month, the US Securities and Exchange Commission (SEC) postponed its decision on a BlackRock proposal for a spot Ethereum exchange-traded fund (ETF). This delay marked another setback for the asset manager as it aims to launch the iShares Ethereum Trust, which will list on the Nasdaq if it receives approval.
