The launch of BlackRock’s tokenized fund on the Ethereum blockchain is significant, as the asset manager has attracted key partners from TradFi and the crypto sector. This is reported by CoinDesk, citing a Bernstein report.
Analysts believe that using a public network instead of private solutions like JPMorgan’s Onyx expands interaction possibilities in the digital asset industry, which “has so far been considered only a retail casino.”
“A system built for retail speculation is beginning to drive institutional utility,” the experts stated.
Previously, BlackRock, in collaboration with the financial firm Securitize, announced the launch of a tokenized money market fund.
The institutional digital liquidity fund BlackRock USD (BUIDL) is backed by U.S. Treasury bills, REPO agreements, and fiat currency. However, the company did not specify the exact launch date of the instrument.
Securitize will act as the tokenization platform, as well as the transfer and listing agent. Anchorage, Coinbase, BitGo, and Fireblocks have joined the initiative as blockchain ecosystem partners, while BNY Mellon will facilitate compatibility with traditional markets.
According to Bernstein researchers, tokenized funds are not new, but BlackRock’s entry will accelerate the attraction of traditional investors to the crypto industry.
“This will be the first major test case for institutional holders to experience the benefits of instant settlements around the clock with increased transparency and capital efficiency at reduced operational costs,” the analysts noted.
Tokenized funds may also become a new “growth category” for asset managers, transitioning from simple investing through ETFs to creating other on-chain products, the company believes.
According to Etherscan, the token with the ticker BUIDL was created on March 5 in the Ethereum mainnet. The issuance is limited to only 100 coins, concentrated with one holder.
“Tokenization can be seen as the next stage in the evolution of financial markets, akin to the ETF wave of the past two decades,” Bernstein concluded.
Earlier, ForkLog reported that the RWA sector grew by 81% in a week. Its capitalization exceeded $8 billion.
Back in November 2023, JPMorgan’s subsidiary (Onyx Digital Assets) and several other companies tested tokenized portfolios on Avalanche and Provenance.