BlackRock, the largest asset manager in the world, announced expanding its flagship tokenized real-world asset fund, the BlackRock USD Institutional Digital Liquidity Fund (BUIDL). Tokenized by Securitize and initially launched on Ethereum earlier this year, BUIDL is now accessible on five additional blockchains: Aptos, Arbitrum, Avalanche, Optimism’s OP Mainnet, and Polygon.
Each of these new chains offers its own set of benefits, such as faster transaction speeds and lower fees, giving investors more options and greater efficiency in their transactions.
BNY, which played a key role in bridging traditional and digital financial ecosystems, facilitated the launch of the fund on these additional blockchains as administrator and custodian for BUIDL.
What is BUIDL?
BUIDL is a tokenized fund backed primarily by short-term U.S. government bonds, such as Treasury bills (T-Bills). The price is set at $1, providing investors with a stable asset with low risk and consistent returns.
The fund pays out daily dividends to investors’ wallets every month in the form of new tokens. Since its launch in March, BUIDL has amassed significant deposits and far exceeded them $520 million in assets under management (AUM), making it the leading tokenized US Treasury market product.
Expand access across multiple blockchains
BlackRock’s expansion of BUIDL to five new blockchains improves the utility and accessibility of the fund.
The expansion also enables the use of BUIDL within DeFi platforms and protocol treasuries, creating a stable and reliable yield option in a market that has historically been volatile. For example, Ondo Finance, a DeFi platform, has already built products using the BUIDL token, demonstrating the growing potential of tokenized funds in decentralized finance.
The fund can also be used as collateral for DeFi trading, which increases its appeal.
Carlos Domingo, CEO of Securitize, expressed his excitement about the expansion, saying:
“The tokenization of real-world assets is increasing and we are excited to see these blockchains added to increase the potential of the BUIDL ecosystem.”
BUIDL charges a management fee of 50 basis points for Ethereum, Arbitrum and Optimism, while the fee is lower (only 20 basis points) for Aptos, Avalanche and Polygon. Ecosystem development organizations including Aptos Foundation, Avalanche (BVI) Inc. and Polygon Labs BD Investments (Cayman) Ltd., will pay BlackRock a quarterly fee.
The rise of institutional adoption in tokenization
BlackRock’s move follows other major steps by major financial institutions to integrate blockchain technology.
Recently, JPMorgan Chase and Visa joined forces to explore the feasibility of tokenizing cash and other assets. State Street, with $4.1 trillion in assets, also recently partnered with crypto tokenization platform Taurus to drive this trend forward.