BlackRock Ascends as Top Tokenized Treasury Fund Amid Promising Future for Blockchain Asset Tokenization
Summary:
The BlackRock USD Institutional Digital Liquidity Fund has overtaken Franklin Templeton’s blockchain fund, becoming the biggest tokenized treasury fund with a market cap of $375 million. Despite limited liquidity causing low demand, tokenization of real-world assets such as stocks and real estate continues to emerge due to its potential to create a more efficient capital market. Boston Consulting Group predicts a $16 trillion market for blockchain-based tokenization by 2030.
The BlackRock USD Institutional Digital Liquidity Fund has become the largest tokenized treasury fund on a blockchain, outperforming Franklin Templeton’s similar product earlier this week. BlackRock's newcomer product, BUIDL, launched just six weeks ago, now boasts a market capitalization of $375 million, overtaking Franklin’s 12-month-old OnChain U.S. Government Money Fund (BENJI), with a market cap of $368 million, according to data from Dune analytics. BUIDL's recent victory came as a result of a $70 million influx, $50 million of which came from Ondo Finance's OUSG token, a company revolutionizing real-world asset tokenization.
Conversely, over this same period, BENJI's assets under management (AUM) observed a dip of 3.7%.
According to source Tom Wan, U.S. Treasurys worth over $1.2 billion now permeate various blockchains, including Ethereum, Polygon, and Solana. Considered the future of finance, the tokenization of real-world assets on blockchains has grown exponentially in popularity. This has even prompted BlackRock CEO Larry Fink to comment on the potential efficiency blockchain could bring to capital markets.
Beyond just Treasurys, other assets, including stocks and real estate, have proven suitable for tokenization too. That said, there currently linear investments in these tokenized products, with Tom Wan of 21.co Research citing limited liquidity as a key challenge.
This posed a "chicken and egg" conundrum for issuers, as they grappled with the profitability of tokenizing assets with such subdued demand, according to Wan's April 30 X post. However, he explained that the existing demand for U.S. Treasurys from the $140 billion stablecoin market players indicated it would be relatively easier to lure end investors when market demand picks up.
Tokenized government securities presently make up 1.4% of total onchain assets, a jump from 0.1% at the start of 2023. Wan, however, predicts that this market will dominate 10% of the sector in due course.
Boston Consulting Group projects that the burgeoning industry of blockchain-based tokenization could transform into a staggering $16 trillion market by the year 2030.
Published At
5/1/2024 2:39:02 AM
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