BlackRock’s iShares Short Maturity Municipal Bond ETF, also known as MEAR, just made history by purchasing municipal bonds issued and fully settled on blockchain.
The bonds, issued by Quincy, Massachusetts in April, were sold via JPMorgan Chase’s private blockchain platform. This deal handled everything from issuance to settlement on the blockchain, completely bypassing traditional methods.
The Quincy transaction involved $6.5 million in municipal debt purchased by BlackRock, a major player in the financial world. A BlackRock spokesperson reportedly called it part of their actively managed ETF, MEAR, which holds $750 million in client assets and has been in use since 2015.
Quincy Bonds and JPMorgan’s blockchain technology
The city of Quincy made a splash earlier this year when it issued bonds using blockchain technology instead of the traditional system. JPMorgan’s blockchain platform, Digital Debt Service, was central to this innovation.
This platform managed everything. No intermediaries are needed, making the process faster and more efficient. The bonds remained on the blockchain from issuance to settlement, a system never before attempted in municipal finance.
BlackRock is the first major player to join the Quincy deal. The company has updated the prospectus of its ETF to allow for blockchain-based bond investing. This required a filing with the U.S. Securities and Exchange Commission, which also outlined risks such as limited liquidity and the possibility of bugs or errors in the blockchain application.
Municipal bonds have traditionally been a conservative corner of the market, full of paperwork and delays. But not when the blockchain is in play.
BlackRock’s ETF remains strong
Launched earlier this year, the iShares Bitcoin Trust (IBIT) is breaking records. In the past day, IBIT has raked in $740 million in inflows. It now manages more than $51 billion in assets, making it one of the fastest-growing ETFs in history.
In the last 24 hours alone, IBIT has raised $740 million. Combined with the influx of Ethereum ETFs, BlackRock’s crypto ETFs reached $860 million in just one day.
To put that into perspective, it has already surpassed BlackRock’s gold ETF, which has been around since 2005. Investors are pouring money into IBIT, while competitors like Grayscale’s Bitcoin Trust are evaporating money. Grayscale has suffered an outflow of $21 billion this year.
Bitcoin’s price trading above $108,000 has further fueled interest. Market watchers expect interest rates to reach $110,000 soon, thanks to accommodative Federal Reserve policy and increased institutional demand.
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