BlackRock Launches New Fund with Securitize, Hinting at Move Into Tokenization

Investment management firm BlackRock is launching a new fund in collaboration with Securitize, as per a recent SEC filing.

The fund, registered in the British Virgin Islands, operates as a pooled investment fund. This structure allows investors to pool their funds together into a single portfolio, providing them with potentially higher returns.

Securitize is a platform facilitating the transformation of tangible assets, like stocks, bonds, and real estate, into digital tokens. Its collaboration with BlackRock hints at the asset manager’s involvement in tokenization. Still, this is not explicitly mentioned in the filing.

Minimum Investment of $100,000 for BlackRock’s Securitize Fund

Tokenization refers to the process of converting real-world assets, like stocks or property, into digital tokens on a blockchain. These tokens represent ownership or value in the asset. It allows for real-time settlement and transparent tracking of assets stored on the blockchain.

The new fund, called the BlackRock USD Institutional Digital Liquidity Fund, requires a minimum investment of $100,000 from external investors, according to the filing.

Many investment banks are already engaged in tokenization. For instance, JPMorgan’s blockchain arm Onyx developed a proof of concept demonstrating the benefits of tokenization in financial asset management.

Tokenization continues to expand, with predictions that “tokenized assets will grow by a factor of 80 in private markets and reach up to almost $4 trillion in value by 2030.”

The tokenization of real-world assets (RWAs) is groundbreaking for investors and businesses alike.…

— Securitize (@Securitize) March 18, 2024

BlackRock’s Bitcoin ETF Emerges as Major Player

In January, BlackRock was among the first Spot Bitcoin ETFs that won approval for trading, and quickly emerged among the top 10 funds with the highest inflows. Its dominance showed the increasing interest in Bitcoin as an investment class.

It swiftly gained traction and became one of the top 10 funds with significant capital inflows, reflecting the growing interest in Bitcoin investments.

By Feb. 27, the trading volume of BlackRock’s Bitcoin ETF exceeded $1b, indicating substantial investor activity. By March 1, the iShares Bitcoin ETF (IBIT) hit a major milestone in the ETF industry by reaching $10b in assets under management.

BlackRock CEO Anticipates Tokenization of All Financial Assets

According to BlackRock CEO Larry Fink, the ETF approval marks just the beginning of a transformative shift in the financial landscape.

Fink said on CNBC that the ETFs are merely the initial stage in the broader process of tokenizing every financial asset.

He believes that migrating assets onto the blockchain will ultimately eradicate corruption from the financial system.