American asset management giant BlackRock has launched its first tokenized fund on the Ethereum blockchain.
The tokenized fund is dubbed the BlackRock USD Institutional Digital Liquidity Fund (BUIDL). This product marks another avenue for BlackRock to deepen its foothold in the blockchain scene.
BUIDL is an initiative made possible with BlackRock’s partnership with Securitize, a startup known for tokenizing real-world assets.
BlackRock Beyond Spot Bitcoin ETF
Over the past year, BlackRock’s venture into the crypto ecosystem remains one of the key highlights of the industry. Many believe throwing its weight behind the spot Bitcoin ETF pursuit last year marked one of the key turning points that helped get approval for the product.
However, the launch of BUIDL with Securitize marks a key pivot for the company. The core aim is to provide qualified investors an avenue to earn Dollar rewards by investing in the fund.
BlackRock will also make it possible for subscribers of BUIDL to issue and trade ownership on Ethereum, gain exposure to on-chain products, and offer on-chain settlement.
The BUIDL product will offer a standard stable value of $1 per token, per the economic dynamics. As BlackRock noted, the assets under management will be invested in “cash, US Treasury bills, and repurchase agreements.”
An important component of the fund is its collaboration with BNY Mellon. The banking giant will help ensure digital and mainstream finance market interoperability.
The BUIDL ecosystem consists of other important players at launch including Anchorage Digital Bank, Fireblocks, and Coinbase, BlackRock’s long-term crypto partner.
Setting a Crucial Pace
The trend involving mainstream firms embracing crypto offerings is at its high point, marked by Commerzbank becoming the first full-service bank to receive a crypto custody license in Germany.
Ripple, alongside its subsidiary Metaco has also helped bridge the gap for mainstream banks looking to offer crypto custody services. British multinational bank HSBC embraced its solution in November last year to offer institutional crypto custody service.