BlackRock has made significant strides today by introducing BUILD, its first tokenized fund on a public blockchain(Ethereum Network). The BlackRock USD Institutional Digital Liquidity Fund, also known as BUILD or the “Fund”, allows investors to earn interest in USD, through Securituze Markets LLC.
Securitize Markets LLC spearheads the tokenization of real-world assets. It provides an opportunity for investors to enjoy real-world tokenized digital assets through futuristic blockchain technology projects.
Through BlackRock‘s mission to uplift people to a position of financial stability, the firm is focused on building and collaborating with projects that align with its goals. BlackRock’s head of Digital Assets, Robert Mitchnick said that their focus is to solve real-world problems for their clients within the digital assets space. As a result, it is necessary to partner and work with like-minded organizations like Securitize.io.
Why is BlackRock so keen on Tokenization of Digital Assets?
BlackRock’s digital strategy is extremely focused on the tokenization of real-world assets. The organization aims to empower blockchain and crypto investors with powerful platforms to generate investment returns. As mentioned by Robert Mitchnick, through the BUILD token, investors can have an opportunity to reap significant benefits on the platform by encouraging the trading and issuance of ownership.
The fund will enable the firm to widen investor access to on-chain offerings, provide transparent and lightning-fast transaction and settlement times, and improve interoperability by supporting cross-chain transfers.
The current developments within the industry show significant strides toward impacting the mainstream financial system. Through such advancements, the firm, along with its partners could change how capital markets work and operate. The tokenization of real-world assets makes financial instruments extremely accessible to investors.
According to the announcement, the BUILD fund will operate as a stablecoin, with a rate of $1 for 1 BUILD. The BUILD token will generate dividends that will be disbursed to investor wallets on a daily basis.
How secure is BlackRock’s tokenized fund BUILD?
The Fund provides several flexible options to investors. Since all of the Funds’s assets are kept in T-Bills, Repurchase agreements, and Cash. The 100% allocation of total assets into real assets allows investors to earn yield while holding BUILD tokens within the blockchain. As mentioned, the funds will be held by the Bank of New York Mellon, as the official custodian.
Also, for liquidity purposes, investors can transfer their digital assets at any time to approved participants within the blockchain.
To solidify authenticity and social approval, the fund is endorsed by BitGo, Coinbase, and Fireblocks among others, by directly participating in the ecosystem. According to the announcements, the Fund will be managed by the able BlackRock Financial Management, Inc.
It is, however, important to state that proceedings earned from holding the BlackRock USD Institutional Fund are not registered by the SEC. Therefore, interests generated from staking BUILD may not be listed on any cryptocurrency exchange platform.
There also arises a conflict of interest in the dealings between BlackRock, Securitize Markets, and some of the project affiliates, since the arrangement may be profitable to all parties. Therefore, it is prudent for prospective investors to perform due diligence and invest with caution.
