BlackRock, the world’s largest asset manager, has unveiled its first-ever tokenized fund, the BlackRock USD Institutional Digital Liquidity Fund (BUIDL). BUIDL leverages the Ethereum network and offers qualified investors the opportunity to earn US dollar yields through a blockchain-based system. Each BUIDL token is backed by a mix of cash, US Treasury bills and repurchase agreements, and offers daily payouts via the blockchain.
This fund caters to qualified investors seeking to earn yields in US dollars through a blockchain-based system. BlackRock has partnered with Securitize to act as the transfer agent and tokenization platform for BUIDL. Robert Mitchnick, BlackRock’s Head of Digital Assets expressed his excitement with Securitize stating,
This launch marks a significant step forward in our digital asset strategy. Our focus is on creating solutions within the digital asset space that address real-world challenges for our clients.
BNY Mellon plays a crucial role in enabling interoperability between BUIDL and traditional markets. Designed to maintain a stable value of $1 per token, BUIDL offers daily payouts in the form of newly issued tokens representing accrued dividends. Investors have the flexibility to transfer their holdings 24/7/365 to a pre-approved pool of investors. BUIDL also provides participants with various custody options for their tokens.
Carlos Domingo, Securitize’s co-founder and CEO remarked,
Tokenization of securities has the potential to fundamentally reshape capital markets. Today’s announcement exemplifies how traditional financial products are becoming more accessible through digitization.
Several prominent players in the crypto industry, including Anchorage Digital Bank NA, BitGo, Coinbase and Fireblocks, are part of the initial BUIDL ecosystem. Details surrounding BUIDL remain limited with the official launch date yet to be announced.
However, a recent SEC filing suggests the fund’s creation occurred in 2023. While the minimum investment threshold appears high at $100,000, the fund aims to provide qualified investors with the opportunity to earn US dollar yields through a blockchain-based system.
While the specifics of BUIDL’s underlying assets are yet to be confirmed, reports indicate a potential $100 million initial investment in USDC stablecoin on the Ethereum network. This aligns with BlackRock’s previously submitted application for a spot Ethereum ETF suggesting a broader institutional interest in Ethereum-based products.
