With two new filings related to blockchain-based U.S. Treasury and money-market funds, BlackRock (BK), the biggest asset manager in the world, is intensifying its pursuit of tokenized finance. The firm is responsible for $14 trillion in AUM.
The asset management behemoth proposed the creation of a new fund that would invest in cash, short-term U.S. Treasury securities, and overnight repurchase agreements backed by Treasuries in a filing with the U.S. Securities and Exchange Commission (SEC) on Friday. The fund would be called the BlackRock Daily Reinvestment Stablecoin Reserve Vehicle.
Banking on Tokenization
The “OnChain Shares” would be issued by the fund using a permissioned mechanism that is linked to several public blockchains. The formal records of ownership for such tokenized shares will be maintained by Securitize Transfer Agent LLC. Using a permissioned architecture connected to public blockchain networks, the transfer agent will keep offchain records that link investor names to wallet addresses, according to the filing.
The filing was vague about the blockchains that would initially be supported by the fund. Potential investors would have to put up at least $3 million. The BlackRock Select Treasury Based Liquidity Fund is a conventional money market fund that manages around $7 billion in assets; separately, the firm submitted documentation to establish a onchain share class for this fund.
In that document, BNY Mellon Investment Servicing, the fund’s transfer agent, detailed their plans to use Ethereum’s official ownership records system, ERC-20 token standards. The official shareholder registry would include of blockchain data and offchain identification mechanisms that connect wallets to investors.
With these registrations, BlackRock is making a stronger move into tokenized finance, a rapidly expanding sector of the digital asset market. The process of establishing digital tokens that reflect conventional financial assets like funds, bonds, or stocks is called tokenization. Proponents of the technology argue that it may increase transparency, facilitate round-the-clock trade, and expedite settlement.
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