BlackRock’s BUIDL Token Fund Draws $245M, Trails Franklin Templeton

BlackRock‘s tokenized fund has rapidly amassed $245 million in deposits, trailing closely behind Franklin Templeton’s older offering. This surge underscores the escalating interest in the tokenized U.S. Treasury market, which analysts predict could soon hit $1 billion with BlackRock’s BUIDL leading the charge.

In its debut week, BlackRock‘s Ethereum-based tokenized fund, BUIDL, witnessed robust demand, bolstered by a $95 million transfer from Ondo Finance. As the demand for real-world asset tokenization intensifies, U.S. Treasuries emerge as a pivotal entry point. Both cryptocurrency firms and established financial giants are racing to leverage blockchain technology for traditional instruments like bonds.

BlackRock‘s foray into the realm of tokenized assets marks a significant milestone, with BUIDL swiftly capturing a substantial portion of the blockchain-based tokenized U.S. Treasury market. Data reveals that BUIDL’s deposits have reached $245 million, placing it second only to Franklin Templeton’s Franklin OnChain U.S. Government Money Fund, which boasts $360 million in deposits.

The trend of tokenizing real-world assets has gained momentum, with prominent players such as HSBC, JPMorgan, and Citigroup exploring blockchain’s potential across various financial domains. U.S. Treasuries, renowned for their low risk and familiarity among investors, serve as an entry point for tokenization efforts. This market has witnessed exponential growth, expanding nine-fold from $100 million in early 2023.

Analysts anticipate that the ascent of BUIDL could propel the tokenized U.S. Treasury market to the $1 billion mark in the near future. BUIDL, built on the Ethereum blockchain in collaboration with asset tokenization platform Securitize, represents an investment in a fund holding U.S. Treasury bills and repo agreements. Its value is pegged to $1, offering holders yields from underlying assets paid in tokens.

Ondo Finance’s decision to transfer $95 million to BUIDL underscores the appeal of blockchain-based solutions for Treasury bill tokens, enabling instantaneous settlements and round-the-clock subscriptions and redemptions compared to traditional exchange-traded funds.

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