BlackRock, the world’s largest asset manager, announced expansion of its flagship tokenized real-world asset fund, the BlackRock USD Institutional Digital Liquidity Fund (BUIDL). Tokenized by Securitize and initially launched on Ethereum earlier this year, BUIDL is now accessible on five additional blockchains: Aptos, Arbitrum, Avalanche, Optimism’s OP Mainnet, and Polygon. 

Each of these new chains offers its own set of advantages, such as faster transaction speeds and reduced fees, providing investors with more options and greater efficiency in their transactions.

BNY, playing a key role in bridging traditional and digital financial ecosystems, facilitated the fund's launch on these additional blockchains as the administrator and custodian for BUIDL.

What Is BUIDL?

BUIDL is a tokenized fund primarily backed by short-term U.S. government bonds, such as Treasury bills (T-Bills). Its price is pegged at $1, providing investors with a stable, low-risk asset with consistent yield. 

The fund pays daily dividends to investors’ wallets in the form of new tokens each month. Since its March launch, BUIDL has amassed significant deposits, surpassing $520 million in assets under management (AUM), making it the leading tokenized U.S. Treasury market product.

Expanding Access Across Multiple Blockchains

BlackRock’s expansion of BUIDL to five new blockchains enhances the utility and accessibility of the fund. 

The expansion also allows for the use of BUIDL within DeFi platforms and protocol treasuries, creating a stable and reliable yield option in a market that has historically been volatile. For example, Ondo Finance, a DeFi platform, has already built products that leverage the BUIDL token, showcasing the growing potential of tokenized funds in decentralized finance.

The fund can also be used as collateral for DeFi trading, boosting its appeal. 

Carlos Domingo, CEO of Securitize, expressed excitement over the expansion, stating:

“Real-world asset tokenization is scaling, and we’re excited to have these blockchains added to increase the potential of the BUIDL ecosystem.”

BUIDL charges a management fee of 50 basis points on Ethereum, Arbitrum, and Optimism, while the fee is lower—just 20 basis points—on Aptos, Avalanche, and Polygon. Ecosystem development organizations, including Aptos Foundation, Avalanche (BVI) Inc., and Polygon Labs BD Investments (Cayman) Ltd., will pay BlackRock a quarterly fee.

The Rise of Institutional Adoption in Tokenization

BlackRock’s move follows other significant steps by major financial institutions to integrate blockchain technology. 

Recently, JPMorgan Chase and Visa joined efforts to explore the feasibility of tokenizing cash and other assets. State Street, with $4.1 trillion in assets, also recently partnered with crypto tokenization platform Taurus to push forward this trend.