BlackRock's BUIDL token has surpassed 1 billion dollars in assets

BUIDL is a security token on Ethereum issued by BlackRock together with Securitize and launched last year. Its purpose is to tokenize the BlackRock

A security token issued by BlackRock and named BUIDL has surpassed 1 billion dollars in assets.

The token, which is distributed on Ethereum and developed by BlackRock together with Securitize, aims to tokenize the BlackRock BUIDL Fund, a fund that provides on-chain USD yield on a large scale.

The acronym BUIDL stands for BlackRock USD Institutional Digital Liquidity.

The token is part of an initiative by BlackRock to tokenize its products and provide investors with new investment opportunities.

The BUIDL token is a security token, which means that it is subject to regulation by the U.S. Securities and Exchange Commission (SEC).

Only selected investors, such as family offices and hedge funds, have had private access to the token, and it is not sold on any crypto exchange.

At present, small retail investors do not yet have access to exchange the BUIDL token.

Those who hold the token are paid a variable interest rate, which is paid out on a monthly basis. The token's price is always 1 dollar.

The BUIDL Fund is a traditional fund that invests in liquid assets that produce returns, such as U.S. government bonds, and aims to distribute these returns to the token holders.

Initially, when it was launched in March of last year, the fund had assets worth $100,000. Therefore, it had issued 100,000 BUIDL tokens at the price of $1.

Now the value of the assets under management, as well as the number of tokens, has increased tenfold.

The fastest growth was recorded in the first months after the launch.

A few weeks after the launch, the fund had already reached $300,000 in assets, and by July it had already surpassed half a million.

Since then, the growth has been much more gradual, so much so that by December it had only reached $550,000.

2023 was started at $650,000, and at the beginning of this week they were still only $668,000.

The BUIDL token is used, for example, as a fundamental reserve asset for yield-generating offerings, and it is increasingly used as collateral on trading platforms.

It is playing a significant role in the tokenization of traditional financial instruments.

Indeed, the crypto tokens supported by U.S. government bonds are among the most prominent in the process of expanding the tokenization of real-world assets (RWA), as it is the traditional finance companies that want to tokenize traditional instruments such as bonds, private credit, and funds to trade them indirectly on the blockchain. The goal is to achieve faster trades and greater operational efficiency.

In turn, the same BUIDL token, which generates yields, is used as a building block for other yield-generating offerings, and it is, for example, the key reserve asset for Ethena’s USDtb token.

In recent days, the fund has allocated 200 million dollars on the USDtb token of Ethena.

Thanks to this new allocation, and a slight increase in the others, the billion-dollar mark has been surpassed.

The USDtb token of Ethena, supported by the stablecoins USDC and USDT and by the same BUIDL tokens, generates returns, and this is why it has been included in the portfolio of the BUIDL fund.

The founder of Ethena, Guy Young, stated:

“The decision of Ethena to increase the investment of USDtb in BUIDL reflects our deep conviction in the value of tokenized assets and the significant role they will continue to play in modern financial infrastructure.”