BlackRock’s Tokenized Treasuries Fund BUIDL Sucks Up $245M In First Week

The market cap of on-chain U.S. treasuries funds tagged new all-time highs amid BUIDL's success.

By: Samuel Haig Loading...

BlackRock’s Tokenized Treasuries Fund BUIDL Sucks Up $245M In First Week

BUIDL, the tokenized U.S. treasuries fund from BlackRock, the world’s largest asset manager, has already pulled in a quarter of a billion dollars during its first week.

On-chain data shows that $244.8 million worth of BUIDL shares are held by seven different wallets, according to Etherscan. BUIDL already ranks as the second-largest tokenized U.S. treasuries fund behind Franklin Templeton’s OnChain U.S. Government Money Fund, which has attracted $360.25 million since launching 11 months ago.

BlackRock’s rapid success has propelled the market cap of tokenized treasuries funds to an all-time high above $876 million.

The BlackRock USD Institutional Digital Liquidity Fund (BUILD) was deployed on Ethereum to much fanfare last week, with many community members celebrating the fund as a major vote of confidence in the network from a world-leading financial institution.

BlackRock described BUIDL as facilitating instantaneous and transparent settlement by leveraging the Ethereum blockchain.

The fund holds U.S. Treasury bills and repurchase agreements, with shareholders earning yields from the underlying assets in the form of BUIDL shares. The price of BUIDL shares are pegged at $1 each.

Qualified investors can access the fund via Securitize Markets, a financial technology firm facilitating share insurance in the form of blockchain-based tokens. BUIDL's minimum initial investment is $5 million.

BlackRock invested in Securitize as part of their partnership. Joseph Chalom, BlackRock’s global head of strategic ecosystem partnerships, was also appointed to Securitize Markets’ board of directors.

On March 27, Ondo Finance, a leading platform for tokenized real-world assets, announced it will shift “a substantial portion” of the assets from the Ondo Short-Term US Government Bond Fund (OUSG), the third-largest tokenized treasuries fund with $88.5 million, into BUIDL.

“We’re excited to see BlackRock embracing securities tokenization with the launch of BUIDL,” Ondo said. “Not only does this further validate our original concept of a tokenized US Treasury fund, but it also bolsters our thesis that tokenization of traditional securities on public blockchains represents the next major step in the evolution of financial markets.”

Robert Mitchnick, BlackRock’s head of digital assets, described BUIDL as the “latest progression” in the firm’s digital assets strategy.

In January, BlackRock launched its iShares Bitcoin Trust (IBIT), which quickly emerged as a leading spot Bitcoin exchange-traded fund (ETF).

IBIT currently boasts $15.4 billion in assets, ranking as the second-largest spot Bitcoin ETF behind the recently converted Grayscale Bitcoin Trust with $23.3 billion, and ahead of the Fidelity Wise Origin Bitcoin Fund with $8.76 billion, according to Bloomberg.

Institutions double down on tokenization

BlackRock is not the only legacy financial institution moving to embrace tokenization.

On March 26, HSBC, one of the ten largest banks worldwide, launched a retail-facing tokenized gold product in Hong Kong amid the local government’s push to embrace web3. The HSBC Gold Token can be purchased via the company’s online banking app.

HSBC described the product as the first retail gold token issued by a bank. “We acknowledge the rising demand for digital assets and the existing familiarity of our customers with gold investment,” said Maggie NG, general manager at HSBC Hong Kong.

Last week, Australia and New Zealand Bank (ANZ), a “big four” bank in both Australasian nations, completed a pilot facilitating the trade of NFTs representing Australian natural resources using the Ethereum and Avalanche networks.