BlackRock, one of the world's largest asset management companies, aims to create a revolution in the investment world by tokenizing the shares of its $150 billion Treasury Trust fund using blockchain technology.
BlackRock has taken a significant step towards digitizing the $150 billion Treasury Trust fund, one of its massive scale funds. The company has filed with the U.S. Securities and Exchange Commission (SEC) to make the shares of this fund digital using distributed ledger technology (DLT). These new shares will only be offered through BNY Mellon, and the ownership records of investors will be maintained digitally using blockchain technology.
In these digital shares, where the minimum initial investment amount is set at $3 million for institutions, there is no lower limit for subsequent investments. BlackRock's CEO, Larry Fink, described this move as 'revolutionary for the investment world' in previous statements, stating that tokenization will provide speed, security, and transparency for investors.
The revolution of tokenization in the finance world
Larry Fink noted in his annual investor letter published in March that tokenization will democratize investment processes. Highlighting that transactions can be completed in seconds thanks to this technology and that billions of dollars that have remained idle due to delays can be reintegrated into the economy, Fink believes that digital shares could become as widespread as traditional ETFs.
However, Fink pointed out that one of the biggest barriers to tokenization is inadequate identity verification infrastructure, and he predicts that if this issue is resolved, digital assets will reach much broader audiences.
Recently, major financial institutions such as JPMorgan, State Street, and Franklin Templeton have similarly started using blockchain technology to digitize their funds. This move by BlackRock could accelerate the use of blockchain-based digital assets in the traditional finance world.