BlackRock’s BUIDL fund Ranks second among peers, raising US$245 million in the first week

BlackRock’s inaugural tokenized asset fund has commenced strongly, swiftly capturing a notable market share within the blockchain-based tokenized U.S. Treasury market just one week after its launch. According to blockchain data, BlackRock’s BUIDL attracted US$245 million in deposits by Wednesday. This successful debut propelled the fund to the second position among its counterparts, trailing only Franklin Templeton’s Franklin OnChain U.S. Government Money Fund (FOBXX), which secured US$360 million in deposits, as per rwa. xyz data.

BlackRock joins the ranks of prominent players venturing into the tokenization of real-world assets (RWA) within the crypto sphere, alongside digital asset firms and global banking giants like HSBC, JPMorgan, and Citigroup. These entities are exploring blockchain technology applications for traditional financial instruments such as bonds, credit, gold, or even diamonds, aiming for expedited settlements and heightened operational efficiency.

U.S. Treasuries serve as a pivotal entry point for tokenization endeavors, offering a secure and familiar investment avenue where investors can deploy their on-chain funds and generate a consistent yield without exiting the blockchain ecosystem. The tokenized Treasury market has experienced exponential growth over the past year, expanding nine times from US$100 million in early 2023.

Tom Wan, an analyst at digital asset manager 21Shares, anticipates that with the expansion of BUIDL, the tokenized U.S. Treasury market is poised to reach US$1 billion shortly.

Operating on the Ethereum network and created in association with the asset tokenization platform Securitize, BlackRock’s BUIDL token is an investment in a fund that owns U.S. Treasury bills and repo agreements. Its value is pegged at US$1, and investors receive a yield from the underlying assets in the form of the token. This offering is tailored towards large institutional investors.