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BlackRock Invests $47 Million in Securitize to Advance Blockchain in Capital Markets
- BlackRock collaborates with Securitize to launch Ethereum-based fund “BUIDL,” targeting qualified investors with a stable-value investment.
- The BUIDL fund, backed by low-risk assets, offers daily dividends paid directly to investors’ wallets, enhancing liquidity and yield.
- With the capability to transfer tokens easily via Circle’s smart contracts, BUIDL merges traditional finance and digital asset flexibility.
BlackRock continues its venture into the world of crypto and tokenisation with its latest collaboration with a leader in the space, a company called Securitize. In late March, we reported that the two companies teamed up to bridge the gap between traditional finance and the digital asset sector, introducing an Ethereum-based fund named BUIDL for qualified investors.
Now, they have announced a US$47 million (AU$72 million) funding round for the project. Tradeweb Markets, Hamilton Lane and ParaFi Capital are also contributing to the investment, according to a press release.
BUIDL as a blockchain-based investment token is designed to maintain a stable value of US$1 per token while offering daily accrued dividends to its investors. These dividends are paid out as new tokens each month, directly into investors’ wallets.
At BlackRock, we believe that tokenization has the potential to drive a significant transformation in capital markets infrastructure. Our investment in Securitize is another step in the evolution of our digital assets strategy.
Joseph Chalom, BlackRock’s Global Head of Strategic Ecosystem Partnerships Transformative Potential of Blockchain Technology
The fund that manages BUIDL invests entirely in low-risk assets such as cash, US Treasury bills, and repurchase agreements. This investment strategy not only helps maintain the token’s stable value but also allows the fund to earn yield, which is then distributed to token holders.
BUIDL tokens provide high liquidity and transferability, allowing investors to exchange their tokens with pre-approved investors anytime via Circle, using smart contracts for convenient position adjustments.
Securitize Co-Founder and CEO Carlos Domingo commented:
In our view, the transformative potential of blockchain technology to reshape the future of finance in general – and tokenization in particular – is promising.
Carlos Domingo, Securitize Co-Founder and CEO Furthermore, BUIDL provides flexible custody options, allowing investors to choose how they want to store or manage their tokens. This flexibility, combined with the stability and passive income features, makes BUIDL an attractive option for investors looking for a blockchain-based financial instrument.
Securitize has built cutting edge infrastructure that enables traditional assets to move onto the high speed, modern rails of blockchains — enabling greater transparency, immediate settlement, reduced counterparty risk, and heightened programmability.
Ben Forman, Founder and Managing Partner of ParaFi Tokens related to RWA and tokenisation rallied as much as 20% on the news.
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Time will tell if tokenisation has the potential to take off and become one of the strongest narratives in the crypto sector.
Author
Aaron Feuerstein
Aaron Feuerstein is a freelance writer based in Melbourne. His focus is on decentralised finance and the regulatory space surrounding blockchain. He holds a Master's in Accounting. When he is not studying the latest legal case, he enjoys his time as a modest but eager hobby cook.
