The tokenization of traditional securities has only just begun, but it has already reached BlackRock, the largest asset manager in the world. BUIDL is a type of money market fund for qualified investors.
Late last week, BlackRock unveiled BUIDL: its first tokenized fund on the Ethereum blockchain.
BUIDL is not for everyone, but only for “qualified investors,” which, in addition to institutions, means individuals who have assets of more than a million dollars and an annual income of at least $200,000. However, since the minimum investment is five million, only institutions and very rich individuals are likely to be eligible.
The fund consists of conservative securities – dollars, treasuries and repurchase agreements – one share is equal to one dollar, and investors receive an interest payment once a month. You can hold the tokens directly in the wallet and transfer them to other qualified investors at any time. Ethereum serves as a blockchain, but it is not entirely clear whether every wallet is eligible or just special wallets.
Anchirage Digital Bank, BitGo, Coinbase, Fireblocks and others are involved in BUIDL. BlackRock is the investment manager, BNY Mellon will be trustee, and startup Securitize will be responsible for tokenization and transfer of the tokens.
In a way, BUIDL is like an interest-bearing stablecoin, not much different than USDM: one share is equivalent to one dollar, which earns small interest using traditional financial instruments. It is regrettable that private individuals cannot participate in such a conservative instrument. This is probably partly due to the regulations, but the minimum deposit goes far beyond their requirements.
For BlackRock, BUIDL is the first attempt at tokenized funds. If it is successful, it could be the starting signal for a technical upgrade of the asset manager’s wide product range, as a result of which all iShares ETFs will sooner or later find their way onto the blockchain. The path clearly runs from top to bottom, from the ultra-rich and institutions down to private individuals.
With a “strategic investment” in Securitize, a startup that tokenizes traditional securities, BlackRock is apparently preparing for the further path of tokenization. Securitize says it has already brought financial products worth more than $400 million onto the blockchain, where they are owned by more than half a million investors. Among the tokenized funds you can find bonds in startups and venture capitalists, government bonds and stock baskets. Most tokens are reserved for qualified investors; Although some are open to the open market, you still have to register to buy them.
So, as big a step as BlackRock and its partners are taking toward tokenizing securities on the blockchain, it is unlikely that traditional finance will embrace the openness that tokens, blockchains and cryptocurrencies actually represent . Instead, it is likely to be a mix that happily adopts the technical advantages of black chains, but tries to exclude the social breakthroughs.
Source: https://bitcoinblog.de/2024/03/25/blackrock-gibt-tokenisierten-fonds-auf-ethereum-heraus/
