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BlackRock Launches New Fund on Ethereum, Bullish on Tokenization

Investing | March 21, 2024

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BlackRock's Next Step:  Dives into Asset Tokenization

BlackRock, the world's largest asset manager with $10 trilion in assets under management, has filed Form D with with the SEC for a soon to be launched USD Institutional Digital Liquidity Fund, its first tokenized asset fund, aiming to redefine investment strategies while offering unprecedented liquidity and efficiency to investors worldwide.  Citigroup has estimated that the tokenized market could expand to $5 trillion.  Traditional investments such as bonds and funds are increasingly being tokenized highlighting the vast potential for growth in this sector. BlackRock's entry into asset tokenization is expected to bridge the gap between digital assets and traditional finance, offering new opportunities for yield.

  • The fund will be tokenized using an ERC-20 token named BUIDL, and will be fully backed by cash, U.S. Treasury bills, and repurchase agreements. It promises daily yield payouts via blockchain to token holders, a leap in asset liquidity and management.  The fund received a significant transfer of $100 million on March 4, indicating strong backing and potential growth.
  • The fund, created under the jurisdiction of the British Virgin Islands, requires a minimum investment of $100,000.  The fund's size is listed as "indefinite," with $525,000 in sales commissions reported.

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  • BlackRock has partnered with Securitize who will act as the transfer agent and tokenization platform, and BNY Mellon will serve as the custodian of the fund's assets. Terms of the deal remain undisclosed.
  • Regulatory clarity and compliance remain major hurdles. BlackRock's participation could pave the way for regulatory clarity to ensure safe and stable digital asset transactions.

Outlook

BlackRock's strategic dive into asset tokenization through its partnership with Securitize and the launch of a digital liquidity fund on the Ethereum network is a glimpse into the future of investment and asset management, setting a new standard for transparency, efficiency, and liquidity in the digital age.

 


NCFA Jan 2018 resize - BlackRock Launches New Fund on Ethereum, Bullish on TokenizationThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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