World’s largest asset manager BlackRock wants to launch a digital ledger technology (DLT) shares for its money market fund. The firm filed the preliminary prospectus with the Securities and Exchange Commission (SEC) on April 29.
According to the filing, the shares will track BlackRock’s BLF Treasury Trust Fund (TTTXX), a $150 billion fund that invests mainly in US Treasury bills, notes, cash, and other obligations issued and guaranteed by the US Treasury.
The firm stated that the shares will be sold through the Bank of New York (BNY) Mellon, with the bank keeping a mirror record of transactions and share ownership on the blockchain. However, it added that the fund does not currently use blockchain technology.
The preliminary prospectus reads:
“Although the Fund does not currently employ blockchain technology or invest in crypto assets, the Financial Intermediary through whom shareholders purchase and redeem DLT Shares intends to employ blockchain technology to maintain a mirror record of share ownership for its customers.”
Unsurprisingly, the product is only available to institutional investors with a minimum investment of $3 million to participate. The firm has yet to propose a ticker for the DLT shares but specified that the management fee will be 0.18%.
Tokenized treasuries already over $6 billion
The move by BlackRock highlights the continued exploration of blockchain technologies by traditional financial institutions to launch new products. BlackRock is already a key participant in this sector with its tokenized US Treasury product, BUIDL, being the biggest tokenized treasury product.
The firm is bullish on blockchain technology and tokenization with the chairman, Larry Fink, identifying the importance of tokenization in making financial products more accessible to investors.
According to data from rwa.xyz, BUIDL, which is a product of Securitize and BlackRock, currently has $2.556 billion in assets under management (AUM) and has seen a net inflow of more than $600 million in the last 30 days. With only 70 holders, its performance captures the solid interest in tokenized products, especially from institutional investors in the decentralized finance sector.
BlackRock BUIDL has seen the highest netflow in the last 30 days (Source: rwa.xyz)
However, other tokenized treasury products are also attracting sizable interest, even if they are not growing on a similar level as BUIDL. Overall, the sector now has $6.16 billion in AUM from 44 products.
The next product with the highest AUM after BUIDL is Franklin Templeton’s BENJI, with $706.77 million. Others, such as Superstate USTB, Ondo USDY, and OUSG, and Circle USYC, also have over $400 million in AUM each.
Despite the growth of these products, many industry experts believe this is still an early stage, and the sector is primed for more growth. Standard Chartered experts predict that the tokenization market could be worth $30 trillion by 2030.
BlackRock IBIT sees record inflows
Meanwhile, BUIDL is not the only crypto-related product from BlackRock that has enjoyed a massively positive performance in recent times. The firm’s Bitcoin exchange-traded fund (ETF), IBIT, also recorded its second-largest daily inflow since launch, with $970.9 million on Monday.
Its inflows on that day contrast with the outflows from competing products, such as Ark 21 Shares ARKB, Fidelity’s FBTC, and Bitwise’s BITB. However, IBIT’s performance was still enough to offset these outflows and ensure $591.2 million in net flow for Bitcoin ETFs.
The product, which has over $50 billion in AUM, has pulled in more than $4.5 billion in inflows since April 22 and accounts for 51% of the value of all spot Bitcoin ETFs.
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