The BlackRock logo is pictured in front of the company's headquarters in the Manhattan borough of New York on May 25, 2021.
Carlo Allegri | Reuters
BlackRock has expanded its tokenized money market fund to include several more blockchains.
The investment manager announced on Wednesday that its USD Institutional Digital Liquidity Fund (BUIDL) is now available to investors on Aptos; Arbitrum; Avalanche; OP Mainnet, formerly known as Optimism; and Polygon blockchains. The fund was originally launched on Ethereum in March.
The BUIDL fund, which BlackRock launched two months after the popular Bitcoin exchange-traded fund iShares Bitcoin Trust, offers investors the opportunity to earn US dollar returns through a blockchain-based vehicle. The idea of tokenizing “real-world assets” like gold, a key aspect of decentralized finance, or DeFi, is gaining popularity among financial institutions that are wary of crypto assets but interested in the underlying blockchain technology.
“There is a certain irony in the fact that… [iShares Bitcoin Trust]“We've taken a crypto-native investment exposure and wrapped it in a traditional financial wrapper… and with tokenization, we're taking a traditional financial investment exposure and wrapped it in a crypto-native wrapper,” says Robert Mitchnick, head of BlackRock digital assets, said in March.
“This dichotomy will persist for a while,” he added at the time. “But we expect that at some point there will be a convergence where the best of the old system and the best of this new technology will be merged into a next-generation financial infrastructure.”
The BUIDL fund is tokenized by Securitize, a company invested in by BlackRock that specializes in tokenizing real-world assets.
The announcement follows a week-long rally in cryptocurrencies following Donald Trump's victory in the US presidential election. Polygon's token climbed 28%, according to Coin Metrics. On the campaign trail, Trump promised more supportive regulations for crypto projects and companies, a shift from the Biden administration's policies in which the U.S. Securities and Exchange Commission has largely regulated the industry through enforcement actions, stifling growth.
DeFi is one of the most popular sectors among crypto market participants, but suffers from a lack of regulatory clarity as tokens from some DeFi projects were classified as securities in SEC lawsuits against Binance and Coinbase last year.