BlackRock advances digital assets strategy with launch of first public tokenized fund

BlackRock has taken a step forward in its digital assets strategy by launching its first tokenized fund on a public blockchain.

The BlackRock USD Institutional Digital Liquidity Fund or BUIDL sits on the Ethereum blockchain and is available through Securitize Markets, providing instantaneous and transparent settlement, and allowing for transfers across platforms.

Investors with an initial minimum investment of $5 million can participate in the fund, which seeks to offer a stable value of $1 per token and pays daily accrued dividends directly to their wallets as new tokens each month.  Investors can transfer their tokens anytime, day or night, to other pre-approved investors.

“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.”

The fund will invest all of its assets in cash, Treasury bills, and repurchase agreements.

BNY Mellon is enabling interoperability for the fund between digital and traditional markets and will serve as the custodian of the fund’s assets and its administrator. Participants will have flexible custody options allowing them to choose how to hold their tokens.

BlackRock has also made a strategic investment in Securitize and the asset manager’s global head of strategic ecosystem partnerships, Joseph Chalom, will sit on the Securitize board.

Securitize co-founder and CEO Carlos Domingo says tokenization of securities could fundamentally transform capital markets.

“Today’s news demonstrates that traditional financial products are being made more accessible through digitization. Securitize is proud to be BlackRock’s transfer agent, tokenization platform and placement agent of choice in digitizing and expanding access to its investment products,” he said.