BlackRock ‘s entry into blockchain with its tokenized BUIDL fund quickly caught the attention of investors, securing deposits worth $240 million.
According to a recent Bloomberg report, BlackRock’s money market fund, which uses the Ethereum blockchain to record ownership of shares, reached an astounding milestone within the first week after launch.
BlackRock’s tokenization solution
BUIDL aims to invest in safe assets such as cash, U.S. Treasury bills and repurchase agreements. Investors in the fund receive BUIDL tokens, each with a fixed value of $1, representing their ownership of the shares.
The fund allows the transfer of tokenized shares between digital portfolios that have been authorized by Securitize, BlackRock’s partner in the venture.
Carlos Domingo, CEO of Securitize, outlines the fund’s utility in a number of scenarios. First and foremost, it serves crypto companies and decentralized autonomous organizations(DAOs) that want to manage their assets directly on the blockchain.
In addition, the fund is positioned as a core asset for crypto projects aimed at developing Treasury bill derivatives. This has opened up new opportunities to use traditional financial instruments in the cryptocurrency ecosystem.
In addition, Domingo added that BUIDL offers a safe alternative to stablecoins, enabling transactions, loans and trading. “It is very institutional in nature, managed by the world’s largest asset manager,” he said. “No crypto company has counterparty risk.”
Ondo Finance is investing $95 million in BUIDL.
The founder of Ondo Finance, known for its cryptocurrencies, Nathan Allman told Bloomberg that the company has already committed $95 million to invest in BlackRock’s BUIDL fund, which represents about 40% of total deposits.
Securitize Markets, which is registered with the Securities and Exchange Commission (SEC) and holds a broker-dealer license from the Financial Industry Regulatory Authority (FINRA), allows token transfers between clients as an alternative solution.
Domingo also touched on the SEC‘s lack of regulatory clarity, saying that the Commission has yet to provide guidance on whether tokenization should take place in private or public blockchains.
