The asset management titan also strategically invested in asset tokenization firm Securitize (Ethereum)

BlackRock, the asset management behemoth, has officially introduced its tokenized asset fund on the Ethereum network, known as the BlackRock USD Institutional Digital Liquidity Fund. Represented by the blockchain-based BUIDL token, the fund is fully backed by cash, U.S. Treasury bills, and repurchase agreements. Yield will be distributed daily to token holders via blockchain rails, according to a press release.

Securitize will serve as the transfer agent and tokenization platform, while BNY Mellon acts as the custodian of the fund’s assets, as stated by BlackRock. Anchorage Digital Bank NA, BitGo, Coinbase, and Fireblocks are also part of the fund’s ecosystem.

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In addition to launching the fund, BlackRock has made a “strategic investment” in Securitize, although the terms of the deal were not disclosed. Robert Mitchnick, BlackRock’s Head of Digital Assets, remarked, “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.”

The announcement followed a regulatory filing that revealed BlackRock’s collaboration with Securitize to incorporate a fund, sparking speculation about a tokenized fund. BlackRock’s entry into the tokenization realm follows moves by other traditional finance giants such as Citi, Franklin Templeton, and JPMorgan. Tokenization of real-world assets (RWA), which involves creating blockchain-based tokens of traditional investments like bonds and funds, is gaining traction as digital assets and traditional finance converge.

Tokenized U.S. Treasuries, for instance, have surged from $100 million in early 2023 to $730 million, reflecting growing interest from crypto firms seeking steady yields by leveraging on-chain funds.

Earlier this year, BlackRock CEO Larry Fink hinted in a CNBC interview that the company’s spot BTC ETF was a precursor to further ventures into tokenization.