BlackRock Seeds Ethereum-Backed Digital Liquidity Fund With $100 Million

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by Tyler Durden
Wednesday, Mar 20, 2024 - 12:00 AM

Having surpassed Microstrategy in the size of its holdings amid the furious success of spot bitcoin ETFs...

...the world’s largest asset manager has taken “the next step forward” toward a single ledger, instantaneous settlement and ending illicit activities, in the view of CEO Larry Fink.

BlackRock, the world’s largest asset manager, has filed United States Securities and Exchange Commission (SEC) Form D for the BlackRock USD Institutional Digital Liquidity Fund. This marks the launch of BlackRock’s first tokenized asset fund.

CoinTelegraph's Derek Andersen reports that. according to the filing, BlackRock created the fund in 2023, but has yet to launch it. Form D is used to obtain various exemptions. BlackRock indicated that it is seeking an exemption under the Investment Company Act Section 3(c), which exempts it from certain SEC regulations. The fund was created under the jurisdiction of the British Virgin Islands.

The fund will have a $100,000 minimum investment and be offered by Securitize, a U.S. digital assets securities firm, which will also conduct the sale of the tokens. The form shows $525,000 in sales commissions, and indicates the size of the fund as “indefinite.” The form was signed on March 14.

The fund will be tokenized on the Ethereum blockchain with an ERC-20 token called BUIDL, which currently has one holder and a $0 on-chain market cap, according to Etherscan.

That website also indicated that the fund received a transfer of $100 million on March 4.

BlackRock USD Institutional Digital Liquidity Fund's SEC filing. Source: SEC

Securitize is registered as a stock transfer agent and alternative trading system with the SEC.

Source: @rleshner on X

It has tokenized assets for asset manager KKR and Spanish real estate investment trust Mancipi, as well as formed a partnership with SBI Digital Markets in Singapore and bought cryptocurrency fund manager Onramp Invest, which had over $40 billion in assets under management.

BlackRock’s spot Bitcoin exchange-traded fund was among the first to receive SEC approval in January. Its CEO Larry Fink, who has been generally bullish about BTC, with reservations, told Bloomberg just after the ETF approval:

"We believe the next step going forward will be the tokenization of financial assets, and that means every stock, every bond […] will be on one general ledger.”

“Every investor, you and I, will have our own number, our own identification. We could rid ourselves of all issues around illicit activities about bonds and stocks and digital by having a tokenization,” Fink added.

He went on to praise customization strategies through tokenization and instantaneous settlement.

As we detailed previously, the bottom line is that while Bitcoin was the pioneer in Wall Street's institutionalization race, having seen the startling success of bitcoin ETF adoption, the financial titans including Goldman, Blackrock - and now - JPM, have set their sights on what comes next, which is something near and dear to the people who manage trillions: the fastest, cheapest and most effective way to tokenize everything, from information, to data, to money itself. And they have picked the token to do it with.

So keep a close eye on what happens on May 23 when the SEC is reportedly pushing hard against ETF approval for the second biggest digital asset: with all three of the largest US financial institutions pushing hard, any resistance will die a quick and painless death.

More in the full notes from JPMStd Chartered and Goldman