While the utility of blockchain technology seems endless, so too is the prospect for coins and
tokens in institutional banking and financial firms. In Spring of this year, Blackrock
announced its offering of a tokenized money-market fund called Blackrock USD Institutional
Digital Liquidity (BUIDL). The fund invests in cash, US Treasury bills, and repurchase
agreements with tokens pegged to $1 USD. Offered only to qualified investors with a
required minimum entry of $5 million, the fund generates dividends, which are then
distributed monthly in the form of new tokens. Unlike other tokenized funds currently on the
market, tokens can be transferred between investors through validated wallet addresses at
any time and settled instantaneously.
The wallet addresses are facilitated by an SEC-licensed trading system from Securitize
Markets and recorded on the blockchain for transparency and security. The fund’s ecosystem
was built on the Ethereum blockchain and developed in partnership with Anchorage Digital
Bank NA, BitGo, Fireblocks, and Coinbase. According to Crypto Briefing, tokenized US
Treasuries now amount to $1 billion, with BUIDL representing almost 25% of that market just
shy of two weeks from its launch. By the end of March, the fund had garnered $245 million
between seven investors. BUIDL, like BlackRock’s spot BTC ETF iShares Bitcoin Trust,
demonstrates how the demand for digital asset exposure in traditional finance is increasing
despite legal ambiguity on classification and jurisdiction.