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BlackRock’s BUIDL sparks real world asset boom

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Blackrock boss Larry Fink was vocal about the benefits if ESG but has now stopped using the acronym
Blackrock boss Larry Fink was vocal about the benefits if ESG but has now stopped using the acronym

Each day, Coinrule will run through the state of the digital assets market for Blockbeat, your home for news, analysis, opinion and commentary on blockchain and digital assets.

Monday greeted us with the first day of Bitcoin ETF inflows after last week’s exodus. This time, Fidelity led the pack with their fifth highest inflow day, with over $261 million. Late last week, more information was released about BlackRock’s BUIDL fund. The market digested it and allocated strongly towards Real World Asset (RWA) related tokens. According to CoinGecko, on Monday, the sector’s market cap grew by over 29% to over $8 billion. 

Last week, we saw BlackRock release their USD Institutional Digital Liquidity Fund (BUIDL). The fund will operate as a tokenised money market fund, investing in cash, US treasuries, and repurchase agreements. BUIDL will capture the assets’ yield, tokenise it and move it onto the Ethereum blockchain. This will provide holders of BUIDL with dividends into their wallets. As we discussed last week, BUIDL is a big move in providing credibility to crypto, Ethereum and tokenisation of RWAs. People term the sector of tokens used to represent ownership in assets on-chain as Real World Assets (RWAs). BUIDL has recently been drawing more attention to tokens related to this.

Monday greeted us with the first day of Bitcoin ETF inflows after last week’s exodus. This time, Fidelity led the pack with their fifth highest inflow day, with over $261 million. Late last week, more information was released about BlackRock’s BUIDL fund. The market digested it and allocated strongly towards Real World Asset (RWA) related tokens. According to CoinGecko, on Monday, the sector’s market cap grew by over 29% to over $8 billion. 

BlackRock’s Larry Fink has been one of the biggest proponents of tokenisation citing the many benefits it brings. These improvements include enhanced ownership transparency, because the owners’ wallets clearly identify they possess the asset’s tokens. Liquidity also increases with tokenisation, as it allows high-value assets such as property or art, to be fractionalised. This opens up investment opportunities to smaller market participants and enables partial investment or divestment across marketplaces. The ability to trade tokens via marketplaces also reduces cost and time. This also removes intermediaries whilst using the lower costs and higher speeds of blockchains to settle payments. Similar to BUIDL, tokens can also be programmed to deposit dividends, or to be used for voting decisions relating to the asset. 

The Boston Consulting Group reports that tokenised assets will reach $16 trillion by 2030. BlackRock seemingly wants a big piece of what appears to be the next stage of finance. BlackRock, however, is not the first to try and provide this, with Crypto-native projects also implementing offerings. Currently, Ondo Finance leads the RWA pack in terms of market cap. It also has a similar offering to BlackRock’s BUIDL, and gives exposure to US Treasuries and money market funds. With Real World Asset tokens currently accounting for around 0.3% of the total crypto market, this sector could be worth keeping an eye on.