BUIDL: BlackRock USD Institutional Digital Liquidity Fund launches on a public blockchain
BlackRock has launched its inaugural tokenized fund on a public blockchain, named the BlackRock USD Institutional Digital Liquidity Fund (BUIDL), targeting qualified investors for U.S. dollar yields. The fund operates in collaboration with Securitize Markets, LLC, facilitating subscriptions.
Robert Mitchnick, BlackRock’s Head of Digital Assets, emphasized the initiative as a continuation of the firm's commitment to innovating within the digital assets sphere. "Our aim is to address our clients' challenges through digital solutions, and we are pleased to partner with Securitize in this venture," Mitchnick stated.
The tokenization of BUIDL allows for several advancements in how ownership and trading are handled, enhancing accessibility, immediate settlement, and cross-platform transferability of fund shares. This digital approach is supported by BNY Mellon to ensure seamless interaction between digital and traditional financial systems.
Designed to maintain a token value of $1, BUIDL distributes dividends directly to investors' digital wallets monthly. The fund is fully invested in liquid assets like cash, U.S. Treasury bills, and repurchase agreements. This structure permits investors to generate yield while the tokens remain on the blockchain, with the added benefit of 24/7 token transferability among approved parties. Additionally, BUIDL offers flexible token custody options.
BlackRock has integrated its tokenized BUIDL fund with Circle, enabling the conversion of BUIDL tokens to USDC, a stablecoin, on a 24/7 basis. This integration enhances the liquidity of the fund by allowing continuous conversions, aligning with the growing trend of digitizing financial products. BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) was designed to provide investors with U.S. dollar yields by tokenizing investments on the blockchain, promising a stable token value and monthly dividend payments in the form of new tokens. The fund is heavily backed by cash, U.S. Treasury bills, and repurchase agreements. Key players in this initiative include Anchorage Digital Bank, BitGo, Coinbase, and Fireblocks, with BlackRock Financial Management serving as the investment manager and Bank of New York Mellon as custodian and administrator.
Key participants in the BUIDL ecosystem include Anchorage Digital Bank NA, BitGo, Coinbase, Fireblocks, and other significant crypto industry players. BlackRock Financial Management will manage the investment operations, while Bank of New York Mellon will handle the custodianship and administrative duties of the fund’s assets. Securitize will oversee the tokenization, and PricewaterhouseCoopers LLP has been appointed as the auditor through December 31, 2024.
The fund's shares are issued under Rule 506(c) of the Securities Act of 1933 and Section 3(c)(7) of the Investment Company Act, with an initial minimum investment of $5 million.
In addition to the fund, BlackRock has invested strategically in Securitize, appointing Joseph Chalom, Global Head of Strategic Ecosystem Partnerships at BlackRock, to Securitize’s Board of Directors, strengthening the partnership between the two entities.
