"No kidding, BlackRock is getting more active in the world of digital assets."
Surprised by the news about BlackRock officially launching its token asset fund called BlackRock USD Institutional Digital Liquidity Fund represented by the blockchain-based BUIDL token on the Ethereum (ETH) network in the last two days.
It is fully backed by cash, United States (US) Treasury bills and repurchase agreements including providing daily blockchain-paid revenue to token holders.
According to BlackRock, Securitize will act as a transfer agent and tokenization platform while BNY Mellon will be the custodian of the fund's assets and Anchorage Digital Bank NA, BitGo, Coinbase and Fireblocks will also participate in the fund's ecosystem.
This is the latest development of its digital asset strategy, said BlackRock's Head of Digital Assets Robert Mitchnick, adding that his team will focus on developing solutions in the crypto space that can help solve real problems for its clients.
The announcement came after a regulatory filing revealed BlackRock had incorporated a fund with Securitize, prompting speculation of a token fund as observers pointed to blockchain transactions.
Please be informed that traditional investment tokens based on blockchain such as bonds and funds are known as tokenizations of real-world assets (RWA), where the use case is growing rapidly for blockchain as digital assets and TradFi become increasingly interconnected.
For example, tokenized US Treasuries have increased from $100 million to $730 million in early 2023 as crypto firms seek to earn stable returns by placing funds in their on-chain.
BlackRock Chief Executive Officer (CEO) Larry Flink said earlier this year in an interview with CNBC that his firm's spot BTC ETF is one of the steps towards tokenization.
