Investing in Tokenized Assets: BlackRock’s New Ethereum Fund Explained

Key Points:

• BlackRock has launched a tokenized asset fund, represented by the BUIDL token, on the Ethereum network.
• The fund is supported by cash, U.S. Treasury bills, and repurchase agreements, providing daily yield to token holders.

BlackRock’s New Ethereum Fund is a tokenized asset fund launched on the Ethereum network. It’s backed by cash and U.S. Treasury bills, providing daily yield to token holders.

BlackRock, the renowned asset management giant, has announced the launch of its tokenized asset fund, named the BlackRock USD Institutional Digital Liquidity Fund, on the Ethereum network.

The fund, represented by the blockchain-based BUIDL token, is fully supported by cash, U.S. Treasury bills, and repurchase agreements, providing daily yield to token holders via blockchain rails.

Key Participants BlackRock’s New Ethereum Fund

Securitize will serve as the transfer agent and tokenization platform for the fund, with BNY Mellon acting as the custodian of the fund’s assets.

Other participants in the fund’s ecosystem include Anchorage Digital Bank NA, BitGo, Coinbase, and Fireblocks. BlackRock has also invested strategically in Securitize, although the terms of the deal remain undisclosed.

Robert Mitchnick, BlackRock’s Head of Digital Assets, commented on the firm’s evolving digital assets strategy, expressing their focus on creating solutions in the digital assets space that address real client needs. He also highlighted the firm’s enthusiasm about working with Securitize.

The announcement follows a regulatory filing indicating that BlackRock had established a fund with Securitize, which led to speculation about a tokenized fund. Observers tracking blockchain transactions linked to the vehicle confirmed these speculations.

Readmore: BlackRock And Fidelity Hold $8.3 Billion In Spot Bitcoin ETFs

BlackRock’s Ongoing Commitment to Digital Asset Technology

BlackRock’s foray into tokenization follows similar moves by major traditional finance firms such as Citi, Franklin Templeton, and JPMorgan.

The tokenization of real-world assets (RWA), including bonds and funds, is becoming a growing use case for blockchains as the boundaries between digital assets and traditional finance continue to blur.

In a CNBC interview earlier this year, BlackRock CEO Larry Fink referred to the company’s spot BTC ETF as “stepping stones towards tokenization”, indicating the firm’s ongoing commitment to exploring and integrating digital asset technology.