BlackRock launches its first blockchain-based tokenized fund

BlackRock has announced the launch of the BlackRock USD Institutional Digital Liquidity Fund, or “BUIDL,” a pioneering tokenized fund on a public blockchain. BUIDL aims to provide qualified investors with U.S. dollar yields through subscriptions via Securitize Markets, LLC.

Robert Mitchnick, BlackRock’s Head of Digital Assets, highlighted the launch as a significant advancement in the company’s digital assets strategy, emphasizing the focus on client-centric solutions in collaboration with Securitize.

The fund’s tokenization is set to revolutionize investor experience by facilitating blockchain-based ownership issuance and trading, enhancing access, and ensuring immediate, transparent settlements. BNY Mellon will support the fund’s interoperability across digital and traditional markets.

Carlos Domingo, co-founder and CEO of Securitize, expressed pride in partnering with BlackRock to democratize access to financial products through digital transformation.

BUIDL promises a stable token value pegged at $1, with dividends paid directly to investors’ wallets monthly. The fund’s portfolio comprises cash, U.S. Treasury bills, and repurchase agreements, enabling yield generation on the blockchain. Token transfers are available round-the-clock to pre-approved investors, with flexible custody options.

Key participants in the BUIDL ecosystem include Anchorage Digital Bank NA, BitGo, Coinbase, and Fireblocks, alongside other crypto industry players.

BlackRock Financial Management, Inc. will manage the investment, with Bank of New York Mellon as custodian and administrator. Securitize will oversee tokenization and manage fund operations, while PricewaterhouseCoopers LLP serves as the auditor until December 31, 2024.

The fund will issue shares under specific SEC rules, with a minimum initial investment of $5 million. Additionally, BlackRock has invested in Securitize, appointing Joseph Chalom to its Board of Directors as part of the strategic move.