The investment industry is gradually making it easier to invest in financial assets through tokenization, that is, through a decentralized and public blockchain transaction chain. The recent approval in the United States of the first bitcoin spot exchange-traded funds or ETFs has opened the door to bringing the world of cryptocurrencies closer to investors. But some asset managers have been devising ways to transform their operational processes to facilitate investment in tokenized financial assets. And, given their low risk and certain appreciation potential in a time of interest rate normalization, money market funds, which invest in very short-term assets such as cash, Treasury bills, and repos, have become the perfect testing ground.
BlackRock has been the latest firm to launch a tokenized money market fund using Ethereum, BlackRock USD Institutional Digital Liquidity Fund (Buidl), which will be accessible to institutional investors with an investable asset volume of at least 25 million dollars and who are willing to place five million dollars in this vehicle. To do this, these investors must have a digital wallet on platforms such as Anchorage Digital Bank, BitGo, Coinbase, or Fireblocks, which will coordinate the operational part with Securitize, the technology firm responsible for tokenization for BlackRock in this fund.
BlackRock attaches so much importance to this system that it has bought a stake in Securitize – which also works with venture capital firms like KKR or Hamilton Lane – indicating that this will not be the only product of its kind that the American manager will launch in the future. In fact, BlackRock has also applied for approval of ETFs on Ethereum to the US regulator.
Robert Mitchnick, director of digital assets at BlackRock, pointed out that this is the latest step in the manager’s strategy for this type of product. “We are focused on developing solutions for digital assets that help solve real problems for our clients,” he emphasized, in statements collected by specialized media, following in Fink’s footsteps, who earlier this year stated that if ETFs have been the first step in the technological revolution of financial markets, the tokenization of each financial asset will be the second.
This is not the first fund of this type on the market. The iShares Short Treasury Bond ETF from BlackRock has a tokenized version by the specialized firm Ondo Finance, which has become the third firm in recent years to perform tokenization protocols on assets in the US money market, where managers like Franklin Templeton in collaboration with Benji Investments also have their own vehicle, the Franklin OnChain U.S. Government Money Fund, which uses Polygon to facilitate access through the Ethereum digital ecosystem.
In Spain, firms are also implementing solutions to facilitate investment through crypto assets. This is the case of the Ursus-3 Capital brokerage firm, which has reached an agreement with Onyze to build portfolios of tokenized assets.
