BlackRock’s Tokenized Fund BUIDL Rakes in $160 Million in a Week

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BlackRock, a titan in the global asset management scene, has garnered remarkable success with the recent deployment of its innovative tokenized money-market fund, BUIDL. The fund, which efficiently tracks shared ownership on the Ethereum blockchain, sparked investor interest at an impressive scale, roping in a staggering $160 million within just seven days since its unveiling.

Often dubbed the BlackRock USD Institutional Digital Liquidity Fund, BUIDL primarily pours investments into cash, US Treasury bills, and repurchase agreements. BUIDL, valued at a dollar per token, serves as a reward for the fund’s holders.

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However, these tokens aren’t just rudimentary rewards. Upon issuance, shareholders carry the freedom to transfer these tokens to other validated addresses using approved digital wallets. This digital tool is courtesy of Securitize, the investment vehicle partner for BlackRock. The tokenized fund harbors a few vital use cases, from offering treasury management for cryptocurrency firms to backing derivatives of Treasury bills, and even standing as collateral for activities such as borrowing and trading. This profile helps position BUIDL as a viable alternative to stablecoins.

This business isn’t accomplished single-handedly. Securitize Markets, an SEC-registered alternative trading system, plays a crucial part in facilitating the seamless transfer of tokens among market participants. And despite the SEC turning its regulatory gaze onto Ethereum’s native token, ETH, Securitize’s CEO Carlos Domingo insists that this scrutiny remains distinct from the underlying blockchain structure. Domingo also commends the resilience of the public Ethereum blockchain, citing its robust capacity to underpin tokenization activities.

BlackRock isn’t a newcomer in the field of cryptocurrencies. The firm’s reputation as a vocal proponent for cryptocurrencies and tokenization within the walls of mainstream finance is well-founded. Larry Fink, the Chairman and CEO of BlackRock, holds a future-forward belief: with time, every financial asset will find itself tokenized. The company’s Bitcoin Trust, named iShares (IBIT), attracted a considerable inflow of over $13 billion since its inception as an ETF in January. And with the BUIDL fund now in the mix, BlackRock reaffirms its intent to delve deeper into the realm of digital asset solutions.

Elsewhere in the sector, Ondo Finance, a niche platform focused on tokenized real-world assets, has announced a transfer of assets worth $95 million to BlackRock’s BUIDL fund. This strategic decision empowers Ondo Finance to prompt instant settlements for its US Treasury-backed token, OUSG. Hence, Ondo Finance marks a significant presence in the BUIDL ecosystem, according to on-chain investigator Tom Wan. Currently holding $15 million worth of BUIDL tokens, Ondo Finance is set to accumulate a virtual mountain of BUIDL tokens, an eye-popping $110 million worth, once the additional $95 million gets factored in.

This collaborative effort promises to fortify the tokenized US Treasury market, positioning it to tap into a $1 billion value potential. The Ondo Finance team, in their official statement, expressed their excitement over BlackRock’s active participation in securities tokenization and the arrival of BUIDL. They highlighted not just the validation of their original concept of a tokenized US Treasury fund but also reinforced their belief in tokenization of traditional securities, on public blockchains, as a significant leap in the evolution of financial markets.

At present, Ondo Finance’s native token, ONDO, trades at $0.909, witnessing a price surge of over 4% in the last 24 hours. This upward trend forms part of an impressive price trajectory of 115% growth over the preceding 30-day period.