BlackRock Launches $100M Tokenized Digital Asset Fund

The largest asset manager in the world with $10T in AUM ventures further into the digital assets space with a $100m digital asset fund.

Nattynatman

Posted on Mar 20, 2024

BlackRock, the world's largest asset manager with $10 trillion in assets under management, has ventured further into the crypto market.

The firm's latest move involves the launch of a tokenized digital asset fund, accompanied by a large deposit of $100 million USDC onto the Ethereum network. This strategic step underscores BlackRock's continued vision of embracing digital assets, revealed in a recent SEC filing.

CEO Larry Fink's interest in the future of finance through digital assets was apparent as early as January 2023, emphasizing the need for innovation in the U.S, through his annual letter to investors.

We are witnessing dramatic advances in digital payments, bringing down costs and advancing financial inclusion. By contrast, many developed markets, including the U.S., are lagging behind in innovation.

He added that tokenization (although not explicity mentioning blockchain technology then), would result in higher efficiency:

The tokenization of asset classes offers the prospect of driving efficiencies in capital markets, shortening value chains, and improving cost and access for investors.

Tokenization involves encoding ownership and other rights onto assets on the blockchain. This process enhances efficiency by streamlining transactions, modernizing otherwise slow, legacy methods that restrict the trading of assets due to limited market hours and significantly slower settlement times.

BlackRock's continued venturing into the digital asset fund arena follows the success of its spot Bitcoin ETF approval, IBIT, which quickly emerged as the highest-traded ETF in the market.

In a recent interview with Bloomberg, Fink expressed optimism about the potential of digital assets, claiming the success of a Bitcoin ETF as a precursor to further innovation in financial instruments.

If we can ETF a Bitcoin, imagine what we could do with all financial instruments

The move towards a tokenized digital asset fund marks a significant milestone in the broader trend of tokenizing real-world assets. Market projections from 21.co estimate that the value of tokenized assets could reach between $3.5 trillion and $10 trillion by 2030, underscoring the immense growth potential of this nascent sector.

Despite currently awaiting approval for an ETH ETF, BlackRock's proactive stance demonstrates its commitment to seizing opportunities in the rapidly evolving digital asset landscape.