Bittime - BlackRock, a well-known investment management company, has had great success with the launch of its first tokenized fund product (BUIDL). This fund succeeded in attracting investor interest and became the number two player in the blockchain-based tokenization of US Treasury securities. Interestingly, this product has raised $245 million in just a week.
According to blockchain data, BlackRock's product, BUIDL, has already raised $245 million in just a week after its launch. This figure puts BUIDL in second place, behind Franklin Templeton's Franklin OnChain US Government Money Fund (FOBXX) which raised $360 million (based on rwa.xyz data).
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BlackRock is the latest player to join the trend of real-world asset (RWA) tokenization using blockchain technology. This trend is being loved by digital asset companies and global banks such as HSBC, JPMorgan and Citigroup.
They see the potential of blockchain to increase the efficiency and speed of transactions in traditional financial instruments such as bonds, credit, gold and even diamonds.
Also read: What is a Treasury Bond (T-Bond)?
US Treasury debt securities were chosen as the initial instrument because they have minimal risk and are widely known. Investors can store their money in digital form (on-chain) and still get stable returns without needing to leave the blockchain ecosystem.
The market for tokenized Treasury securities has boomed over the past year, with growth reaching ninefold from $100 million by early 2023.
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"With the growth of BUIDL, we will likely soon see a $1 billion tokenized U.S. Treasury securities market," said Tom Wan, an analyst at digital asset management firm 21Shares.
BlackRock's BUIDL token was created on the Ethereum blockchain with the help of asset tokenization platform Securitize. This token represents an investment in a fund containing Treasury bills and a US repo agreement.
Also read: What is a Token?
The price of this token is pegged at $1 and token holders will receive returns from the underlying asset paid in the form of tokens. This product is aimed specifically at large institutional investors.
As an example of investor interest, RWA tokenization platform Ondo Finance moved $95 million of its funds to BUIDL. They switched from previous products using less popular exchange-traded funds (ETFs), to BlackRock's blockchain-based products. This allows Ondo Finance to carry out instant settlements and make subscriptions and redemptions at any time.
About BlackRock
BlackRock is a company that aims to help more people achieve financial well-being. This company acts as a fiduciary (a party that is obliged to act in the best interest of the other party) for investors and leading financial technology providers.
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BlackRock helps millions of people build savings for their future by making investing easier and more affordable.
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Also read:
BUIDL Network: A Paradigm Shift in Blockchain Development
How Much Bitcoin Does BlackRock Own?
Bitcoin ETFs: BlackRock and Fidelity Still Lead the Market
BlackRock Bets Big on RWA: A Token Worth Watching
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