Bankless: Why BlackRock’s launch of tokenized fund BUIDL is significant

Author: Jack Inabinet, Bankless; Compiler: Deng Tong, Golden Finance

Modern technology has rapidly reshaped society in the 21st century, but many aspects of our financial system have become outdated due to outdated technologies and processes. behind.

Tokenization brings a paradigm shift in asset ownership and trading, with a unique A range of benefits, including enhanced liquidity, improved accessibility, reduced costs, increased transparency and increased composability.

BlackRock CEO Larry Fink has previously acknowledged the benefits of tokenization and said he believesTokenized assets are the next generation of assets for the market, His company made waves in the cryptocurrency space last week by launching a The first tokenized fund issued on a public blockchain!

This new The investment vehicle is called "BlackRock USD Institutional Digital Liquidity Fund" and has the symbol BUIDL, It will enable on-chain investors to earn money market returns and provide them with tokenized proof of their holdings on Ethereum.

The crypto industry has seen similar experiments in tokenizing real-world assets, with the BlackRock fund’s initial $5 million minimum subscription putting it beyond the reach of the average person.

BUIDL is not just another tokenized fund; it is a landmark initiative, It may one day become a turning point in the on-chain revolution.

Unlike competing products, What makes BUIDL unique is BlackRock With its outsized influence, BlackRock is widely considered a leader among institutions given its deep ties to the U.S. political and financial world.

When markets were in turmoil during the 2008 global financial crisis, BlackRock helped public and private institutions evaluate complex and distressed mortgages that were at the center of the turmoil backing securities, solidifying its position as a global asset management leader.

During the craziest days of the pandemic, the Federal Reserve hired BlackRock to advise it on buying billions of dollars in corporate debt in an emergency effort to address bond market problems.

BlackRock’s Aladdin platform provides comprehensive risk analysis for more than 200 large financial institutions, and managed more than 20 trillion assets at the last count in 2020 (this number is undoubtedly since It has been growing ever since).

To date, adoption of tokenization by TradFi giants has been almost non-existent, with the largest such product, Franklin Templeton’s OnChain U.S. Government Currency Fund, contributing just 0.025% of its issuer’s assets under management. But when BlockRock makes a move, the market pays attention.

BlackRock not only launched its first on-chain fund, but also disclosed its strategic investment in Securitize, Securitize is a tokenization platform for the issuance and management of BUIDL tokens and a registered broker-dealer selling the instrument to end investors.

Source: Business Wire

Given Fink’s previous public statements praising tokenization and BlackRock’s capital expenditures to gain an ownership foothold in the industry, it’s likely the company plans to do so in the future Deploy more tokenized products.

Due to the company’s prominence, BlackRock has shown a willingness to invest time and capital into tokenized products, thereby significantly reducing the friction of interacting with blockchain technology. Reputational risk clears the way for other institutions to participate in tokenization.

The crypto industry may have found itself attracted by the success of spot Bitcoin ETFs, with inflows helping push the price of Bitcoin to all-time highs, but tokenization promises to have an even more transformative effect on the industry Impact, hundreds of billions of dollars worth of existing capital are waiting for institutions like BlackRock to guide them on the chain.

The arrival of BUIDL is a clear signal that a new era of financial markets is coming, one that fully embraces tokenization and triggers a new wave of cryptocurrency adoption!