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BlackRock launches its first Ethereum tokenised fund

Thursday, March 21, 2024

With this fund, BlackRock is further strengthening its position in the crypto world.

BlackRock continues to make its way in the crypto universe. After launching its Bitcoin Spot ETF in January, the world's largest asset manager ($9,000 billion) officially announced on Thursday the launch of its first tokenized fund issued on the public Ethereum blockchain.

Named "BUIDL" (BlackRock USD Institutional Digital Liquidity Fund), this $100 million fund offers qualified investors - in other words, "professionals" - the opportunity to earn dollar returns from liquidity or US Treasury bills by holding the fund's token which promises to maintain parity with the dollar.

One of the advantages of the blockchain is that investors can of course exchange their tokens at any time with other investors previously validated (whitelisted) by BlackRock.

To manage its fund, BlackRock has enlisted the services of Coinbase and Securitize to provide blockchain infrastructure, and it is the American bank BNY Mellon that will link the BUIDL fund to traditional markets, as indicated by the company's press release.

Functioning similarly to a crypto-native stablecoin

In the crypto universe, the fund's mechanism could be likened to that of a stablecoin from which users can earn returns, as is the case with MakerDAO's Dai or other decentralized stablecoins. The difference is that BlackRock's token cannot, for now, be integrated into decentralized finance protocols.

Note that other stablecoins like Circle's or Tether's, currently the two market leaders, do not directly share the returns from their reserves (almost exclusively from US Treasury bonds) directly with their users. Can this launch by BlackRock change the game?

In any case, this launch perfectly illustrates how institutional investors are trying to enter the public blockchain by launching products only accessible to identified investors, far from one of the great promises made by many figures in decentralized finance (DeFi), namely to offer individuals financial products normally reserved for professional investors.

With this launch, BlackRock further asserts its ambitions in the world of digital assets, as its boss, Larry Fink, recently explained on American television: "All financial assets are going to be tokenized, stocks, bonds... and BlackRock has a role to play in this evolution of financial markets".

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Cette analyse n'est pas un conseil en investissement. Elle a été rédigée sans prendre en compte votre situation personnelle et notamment votre situation financière, votre profil de risque et vos objectifs d’investissement.

Avant d’investir dans un produit, l’investisseur doit comprendre entièrement les risques et consulter ses propres conseillers juridiques, fiscaux, financiers et comptables.

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