According to the United States economic calendar, over $1 billion worth of Treasury assets have been transferred to various blockchains, including Ethereum, Polygon, and Solana. This increase in activity can be attributed, at least in part, to the recent introduction of the BlackRock USD Institutional Digital Liquidity Fund.
The "BUIDL" product from BlackRock was introduced on Ethereum on March 20 and has currently reached a market capitalization of $244.8 million. Etherscan reports that the fund has received a significant increase of $95 million through four transactions over the past week, propelling it to become the second largest government securities fund in tokenized form.
According to data from the parent company of 21Shares on a Dune Analytics dashboard, BUIDL is currently ranked second behind Franklin Templeton's Franklin OnChain U.S. Government Money Fund (FOBXX), which holds $360.2 million in U.S. Treasurys and has been in existence for 11 months.
The dashboard reveals that a total of $1.08 billion in U.S. Treasurys has been tokenized through 17 different products.
Ondo Finance, a real-world asset tokenization firm, recently deposited $79.3 million to BlackRock's fund. This deposit enables instant settlements for their U.S. Treasury-backed token, OUSG. In total, the firm completed four transactions, amounting to $95 million, as per Etherscan records.
According to Tom Wan, a research strategist at 21.co, Ondo Finance currently holds a 38% stake in BUIDL as stated in their March 27 X post.
The value of BUIDL is fixed at a 1:1 ratio with the US dollar and distributes accrued dividends to investors on a daily basis every month. The platform was introduced on Ethereum using the Securitize protocol.
According to 21.co's Dune dashboard, tokenized government treasuries are considered more attractive in terms of risk and return compared to stablecoin yields due to the current high-interest rate climate.
According to Larry Fink, the CEO of BlackRock, blockchain tokenization could potentially increase the efficiency of capital markets. This technology is predicted by Boston Consulting Group to reach a market value of $16 trillion by the year 2030.
Tokenization of assets is not limited to U.S. Treasurys, as there are other options such as stocks and real estate that can also be tokenized.
According to FXStreet, Ethereum is responsible for the tokenization of $700 million worth of real-world assets (RWA) through on-chain processes.
FOBXX by Franklin Templeton has been tokenized on both Stellar and Polygon, with the two platforms having the second and third highest market share in tokenized products, currently valued at $358 million and $13 million, respectively.
In the realm of asset management, WisdomTree is one of the major firms that is currently involved in the tokenization of RWAs. Other players in this market include Ondo Finance, Backed Finance, Matrixdock, Maple Finance, and Swarm, all of which are blockchain-based companies.
About BlackRock
By several metrics, BlackRock Inc. (BLK) stands as the leading global investment management firm, overseeing assets surpassing $10.0 trillion as of December 31, 2021. With a substantial market capitalization of approximately $112.3 billion, BlackRock serves a diverse clientele, offering investment and technology solutions to both institutional and retail investors worldwide.
Providing a broad array of funds and portfolios spanning equities, money market instruments, and fixed income securities, BlackRock caters to clients seeking access to mutual funds, retirement income strategies, college savings plans, and exchange-traded funds (ETFs).
Notably, BlackRock serves as the parent entity for the iShares family of ETFs, recognized as the largest global ETF provider.
Primarily, BlackRock generates revenue through investment advisory and administrative fees levied on its clients. Key competitors include The Vanguard Group, State Street Corp. (STT), and T. Rowe Price Group Inc. (TROW).