May 30, 2024
BlackRock's Tokenized Fund Now Transferrable to Circle Using USDC
Altcoins News

BlackRock’s Tokenized Fund Now Transferrable to Circle Using USDC

Circle, the issuer of major stablecoin USDC, has enabled transfers of BlackRock USD Institutional Digital Liquidity Fund (BUIDL) shares to its stablecoin.

Tokenized Fund Transfers Made Easier

Circle has unveiled a groundbreaking smart contract feature on April 11, empowering BUIDL holders to seamlessly exchange their shares for USDC directly with Circle. This innovation streamlines the process of transferring BUIDL shares for USDC on the secondary market, offering investors a convenient “near-instant” off-ramp available 24/7.

What is BUIDL?

Introduced by BlackRock in March 2024, BUIDL stands as a tokenized fund leveraging the Ethereum blockchain to deliver U.S. dollar yields through tokenization. Investors can acquire tokens representing fund shares, which are invested in assets such as U.S. Treasury bills. Termed the “digital liquidity fund,” BUIDL operates as an ERC-20 token on the Ethereum blockchain, offering a digitized form for seamless transactions.

BlackRock’s Move into Tokenized Funds

The new investment tool is the first tokenized fund introduced by BlackRock, which is also the operator of the fastest-growing spot Bitcoin exchange-traded fund (ETF) in the United States.

Circle CEO’s Perspective

According to Circle co-founder and CEO Jeremy Allaire, tokenization of real-world assets is a rapidly emerging product category. “Tokenizing assets is but one important dimension of solving investor pain points. USDC enables investors to move out of tokenized assets at speed, lowering costs and removing friction,” Allaire stated.

BlackRock’s Crypto Industry Presence

BlackRock is one of the biggest players in the cryptocurrency industry, operating the iShares Bitcoin Trust (IBIT) spot Bitcoin ETF, which holds 266,580 BTC, worth $18.5 billion as of April 10. In January 2024, IBIT made history as one of the pioneering spot Bitcoin ETFs to be introduced after receiving regulatory approval from the U.S. Securities and Exchange Commission.

Circle and BlackRock Collaboration

BlackRock’s ongoing partnership with Circle represents a strategic alliance that has evolved over the years within the crypto industry. Back in 2022, Circle’s investment in the Circle Reserve Fund marked the beginning of a fruitful collaboration aimed at jointly managing a segment of the USDC reserves alongside BlackRock. The firm expected its composition to continue to be around 20% cash and 80% short duration U.S. Treasuries. The Circle Reserve Fund is a registered Rule 2a-7 government money market fund managed by BlackRock Advisors, and its portfolio consists of cash and short-dated U.S. Treasuries.

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