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BlackRock’s (BLK) launch of its first tokenized fund on a public blockchain is significant given how the asset manager has brought in key ecosystem partners from both the TradFi world and the crypto sector. , broker Bernstein said in a research report on Tuesday. .
As part of the growing trend of digitizing mutual funds and securities on blockchain, investment giants last week First tokenized fund On the Ethereum network,
Bernstein said that while tokenized money market funds are not new, the launch of the BlackRock USD Institutional Liquidity Fund (BUIDL) is a sign that investment managers will be able to leverage “both the traditional world and the crypto world. “We have brought in key ecosystem partners from around the world,” he said.
Analysts Gautam Chughani and Mahika Sapra said: “This will foster interoperability between the two sides and allow more traditional customers to feel comfortable adopting on-chain funds without major friction points. ” he said.
The fund is represented by the blockchain-based BUIDL token and is fully backed by cash, U.S. Treasury bills, and repurchase contracts. Mr Blacklock said:.
The investment manager said Securitize will act as the transfer agent and tokenization platform, while TradFi institution BNY Mellon is the fund’s custodian. Anchorage Digital Bank NA, BitGo, Coinbase, and Fireblocks will also join the fund’s ecosystem.
The authors write that this is the first major test case for institutional investors to experience the benefits of 24/7 instant payments on the blockchain with increased transparency, capital efficiency, and lower costs.
The decision to use Ethereum as a public blockchain instead of using a private blockchain “allows for a wider design space for interoperability and programmability,” the report said, adding that stablecoins’ It added that the integration could allow redemption of tokenized funds to occur on-chain.
On-chain funds have the potential to develop into a new growth category for asset management companies. “There is potential for an evolution towards building multi-asset products and unit economics,” the report added.
read more: Brevan Howard-backed tokenization company Libre goes live
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