BlackRock, the world’s largest asset manager, today launched its first tokenized investment fund, the BlackRock USD Institutional Digital Liquidity Fund (BUIDL). 

Per its official statement, the move signals a major shift towards the integration of blockchain technology into traditional finance. The fund, built 

on the Ethereum network, aims to provide qualified investors with U.S. dollar yields accessible through Securitize Markets, LLC.   

Robert Mitchnick, BlackRock’s Head of Digital Assets, said the fund focuses on solving client issues in the digital space. “This is the latest progression of our digital assets strategy. We are focused on developing solutions in the digital assets space that help solve real problems for our clients, and we are excited to work with Securitize,” he added.

BUIDL offers a stable token value pegged at $1, distributing dividends directly to investors’ wallets monthly. It focuses on investments in cash, U.S. Treasury bills, and repurchase agreements, ensuring yields for token holders on the blockchain. The fund introduces 24/7 token transfers among pre-approved investors, along with flexible custody options.

Prominent crypto infrastructure providers like Anchorage Digital Bank NA, BitGo, Coinbase (NASDAQ:COIN), and Fireblocks are among the first participants supporting BUIDL. BlackRock has chosen Bank of New York Mellon for asset custody and fund management, while Securitize will manage tokenization and fund operations.

Additionally, BlackRock has invested in crypto infrastructure specialist Securitize, appointing Joseph Chalom, Global Head of Strategic Ecosystem Partnerships at BlackRock, to Securitize’s Board of Directors. 

The fund’s token shares will be issued under specific U.S. securities regulations, with an initial investment threshold of $5 million. PricewaterhouseCoopers LLP will audit the fund operations to ensure compliance with relevant regulations.

“Tokenization of securities could fundamentally transform capital markets. Today’s news demonstrates that traditional financial products are being made more accessible through digitization. Securitize is proud to be BlackRock’s transfer agent, tokenization platform and placement agent of choice in digitizing and expanding access to its investment products,” said Securitize co-founder and CEO Carlos Domingo.

Earlier this month, the U.S. Securities and Exchange Commission (SEC) postponed its decision on a proposal from BlackRock for a spot ethereum exchange-traded fund (ETF). This delay marked another hiccup for the asset manager as it aims to launch the iShares Ethereum Trust, which is set to be listed on the Nasdaq should it receive approval.