TLDR
- BlackRock’s tokenized BUIDL fund has paid $7 million in dividends since March 2024
- BUIDL’s monthly dividend payouts have increased each month, reaching $2.12 million in July
- The fund has attracted $500 million in capital and is the largest tokenized US Treasury investment fund
- BUIDL is BlackRock’s first tokenized fund issued on a public blockchain (Ethereum)
- Tokenized government debt funds are gaining popularity among institutional investors
BlackRock’s tokenized United States Dollar Institutional Digital Liquidity Fund (BUIDL) has been making waves in the world of digital assets since its launch in March 2024. The fund, which invests in U.S. Treasury Bills, cash, and repurchase agreements, has paid out $7 million in dividends to investors in just five months.
BUIDL’s dividend payments have shown consistent growth month over month. According to asset tokenization firm Securitize, the fund distributed $265,400 in its first month. This amount increased to $1.21 million in April, $1.67 million in May, $1.82 million in June, and reached an all-time high of $2.12 million in July.
BUIDL breaks a new record, paying out $2.1M in July and over $7M since March. š@BlackRock USD Institutional Digital Liquidity Fund (BUIDL) pays out dividends monthly to holders on the @ethereum blockchain.
BUIDL remains the largest tokenized fund, providing US dollar yieldsā¦ pic.twitter.com/QiS6exLUZU
— Securitize (@Securitize) August 1, 2024
The fund’s rapid growth has been remarkable. In April 2024, BUIDL surpassed Franklin Templeton’s Franklin OnChain US Government Money Fund (BENJI) to become the world’s largest tokenized government debt investment fund. By July 2024, BUIDL had attracted $500 million in capital, solidifying its position as the leading tokenized US Treasury investment vehicle.
BUIDL represents BlackRock’s first venture into tokenized funds issued on a public blockchain. The fund operates on the Ethereum network, which allows for the issuance and trading of ownership on a blockchain. BlackRock states that this approach offers several benefits, including expanded investor access to on-chain offerings, instantaneous and transparent settlement, and the ability to transfer across platforms.
The success of BUIDL aligns with a growing trend in the crypto industry towards real-world asset tokenization. Other financial institutions are also entering this space. Goldman Sachs recently announced plans to introduce three new tokenized products in 2024, focusing on funds in the US and European debt markets.
Institutional investors are increasingly embracing tokenized money market funds due to their improved liquidity, accessibility, and efficiency compared to traditional funds, according to financial services firm Deloitte.
The rise of these funds comes at a time when the total US national debt has surpassed $35 trillion, leading some analysts to speculate about potential impacts on the US dollar’s value.
While some see the growing national debt as a catalyst for a return to alternative assets like Bitcoin, others believe that the demand for the US dollar from stablecoin issuers and tokenized debt instruments could potentially support the currency’s stability.
Beyond its role as an investment vehicle, BUIDL is also being leveraged by DeFi protocols such as Ondo for their derivative products, further integrating the fund into the broader digital asset ecosystem.
BlackRock’s involvement in tokenized funds extends beyond BUIDL. The firm is also among the leading providers of spot Bitcoin ETFs and spot Ethereum ETFs, with the latter beginning trading on July 23, 2024.
However, BlackRock’s chief investment officer, Samara Cohen, has indicated that additional funds based on other cryptocurrencies are unlikely in the near future.
As of August 2024, BUIDL’s market value stands at approximately $522 million, according to Etherscan data. The fund’s success demonstrates the growing interest in tokenized traditional assets and the potential for blockchain technology to reshape the investment landscape.
