BlackRock Leads the Way: Raising Real-World Asset (RWA) Tokenization Fund on Ethereum
BlackRock, a behemoth in asset management, recently debuted a new fund on the Ethereum network, signaling its entry into the field of asset tokenization. Additionally, the company strategically invested in Securitize, a prominent player in asset tokenization.
According to documents filed with the U.S. Securities and Exchange Commission, the fund has set a minimum investment threshold of $100,000. BlackRock will introduce a new Real World Assets (RWA) tokenization fund on the Ethereum network. This asset management giant has formally launched a tokenized asset fund on the Ethereum network. Reports suggest that the BlackRock USD Institutional Digital Liquidity Fund, represented by blockchain-based BUIDL tokens, is fully backed by cash, U.S. Treasury securities, and repurchase agreements. The fund will distribute returns to token holders daily via blockchain rails. BlackRock stated that Securitize will act as the transfer agent and tokenization platform, while The Bank of New York Mellon will serve as the custodian for the fund's assets. Anchorage Digital Bank NA, BitGo, Coinbase, and Fireblocks are also involved in the fund's ecosystem.
The underlying assets of this fund consist of cash, US bonds, and repurchase agreements, indicating that these funds will be invested in these asset classes to ensure the stability and growth of the fund's value. Additionally, the fund will utilize blockchain technology to track the ownership and trading of assets.
The fund will also distribute returns to token holders daily via the blockchain, providing investors with a faster and more convenient way to access their earnings
Following advancements by Citigroup, Franklin Templeton, and JPMorgan Chase in this technology, BlackRock is the latest traditional financial giant to enter the tokenization arena. With digital assets and traditional finance (TradFi) becoming increasingly intertwined, creating blockchain-based tokens for traditional investments like bonds and funds (known as Real World Asset tokenization or RWA) has become a rapidly growing use case for blockchain. For example, with cryptocurrency companies seeking stable returns through on-chain funds, tokenized U.S. Treasury bonds have surged from $100 million in early 2023 to $730 million.
The Bank of America recently referred to RWA tokenization as a 'key driver of digital asset adoption.' According to their report, the tokenized gold market has attracted over $1 billion in investments. According to data compiled by CoinDesk, demand for tokenized U.S. Treasury bonds is also on the rise, with the total market value of tokenized currency market funds approaching $500 million.
At present, the outlook for tokenization is bright, with Boston Consulting Group predicting that the tokenized asset market could surge to $16 trillion by 2030.
As an economic and blockchain expert, I am extremely excited and optimistic about BlackRock's move to launch a new fund on the Ethereum network. This initiative will have profound implications for the financial market, not only for the asset management industry but also as a significant validation for the application of blockchain technology.
From an economic perspective, asset tokenization is a revolutionary financial model that has the potential to transform the operation of traditional financial markets. This model converts traditional assets into digital tokens, thereby increasing asset liquidity, reducing transaction costs, and providing investors with more diversified investment opportunities. As one of the world's largest asset management companies, BlackRock's entry into this field signifies that this trend has become an undeniable future direction.
From a blockchain expert's viewpoint, BlackRock's launch of a new fund on the Ethereum network further validates the application value of blockchain technology in the financial sector. The decentralized, transparent, and secure nature of blockchain technology makes it an ideal platform for achieving asset tokenization. BlackRock's collaboration with companies like Securitize to apply asset tokenization technology in real investments not only provides investors with more efficient investment channels but also promotes the application and development of blockchain technology. BlackRock CEO hinted at the next step: to tokenize stock and bond settlements! Financial asset tokenization can eliminate all corruption. If you have tokenized securities and a tokenized identity, when you buy or sell a tool, it will be recorded on a jointly established ledger. Think of problems like money laundering, through the tokenization system, all corruption can be eliminated. This is the advantage of blockchain.
As for the unstoppable trend of Real World Asset (RWA) tokenization funds, I firmly believe that its unstoppable momentum is evident. I have been paying attention to the trend of RWA since early last year. With the digital transformation of global financial markets, the demand for asset tokenization continues to grow among investors. RWA tokenization funds, as an innovative investment tool, will be able to attract more capital inflows and drive the development and transformation of the financial market. Influenced by this, the RWA track protocol has risen against the trend, with Ondo Finance ($ONDO) and Centrifuge ($CFG) surging by 70% and 34.42% respectively from March 20.