The world’s largest asset manager, BlackRock, has revealed some details of its new real-world asset (RWA) tokenized fund. Dubbed ‘BUIDL,’ it will be built on the Ethereum network in partnership with financial services firm Securitize and is BlackRock’s first tokenized fund issued on a public blockchain.
BlackRock Launches BUIDL On Ethereum
BlackRock’s foray into the crypto spot exchange-traded (ETF) world over the past year rocked the financial industry. Many believe BlackRock filing its spot Bitcoin ETF application last year largely contributed to the product eventually securing SEC approval.
Now, the financial giant is expanding beyond ETFs. BlackRock is now launching a tokenized private equity fund on Ethereum as it deepens its foray into digital assets.
According to the Form D filing with the SEC, the BlackRock USD Institutional Digital Liquidity Fund (BUIDL) was first registered under the jurisdiction of the British Virgin Islands in 2023. BUIDL is designed to give qualified investors a novel way to earn US dollar yields via subscriptions.
“BUIDL will offer investors important benefits by enabling the issuance and trading of ownership on a blockchain, expanding investor access to on-chain offerings, providing instantaneous and transparent settlement, and allowing for transfers across platforms,” BlackRock said in the press release.
BUIDL will be tokenized on the Ethereum blockchain and is fully backed by cash, U.S. Treasury bills, and repurchase agreements. It was initially seeded with $100 million USDC. The fund targets a stable token value of $1, distributing daily accrued dividends to investors every month as new tokens.
Commenting on the launch, Robert Mitchnick, BlackRock’s Head of Digital Assets, said that it is an important milestone in the company’s digital assets strategy.
“This is the latest progression of our digital assets strategy,” Mitchnick stated. “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.”
BlackRock Financial Management, Inc. will manage the fund, with the Bank of New York Mellon serving as the custodian and administrator of the fund’s assets. BUIDL’s initial minimum investment is set at $5 million, BlackRock said, and it will issue shares under precise SEC rules.
BlackRock has also tapped Securitize Markets to act as the transfer agent and tokenization platform. As part of the partnership, BlackRock made a strategic investment in Securitize and appointed its global head of strategic ecosystem partnerships, Joseph Chalom, to Securitize’s board of directors.
Crypto Community Has Its Say
Prominent Ethereum educator and angel investor Anthony Sassano was among a number of industry figures to comment on BlackRock’s launch of its tokenized fund.
“BlackRock launching a yield-bearing stablecoin on Ethereum is still one of the most bullish things to ever happen in crypto and the market has definitely not digested this yet,” Sassano stated, stressing the huge impact of such a move.
Ethena Labs’ head of growth, Seraphim Czecker, shared his excitement on X: “Freaking Blackrock launched a yield-bearing stablecoin and you’re not bullish on crypto. We have come a long way.”
Ethereum community member Ryan Berckmans described the move as “very bullish”.
The price of ETH was hovering at around $3,428 at press time, a 3.3% increase over the past 24 hours.
