BlackRock launches a dollar stablecoin based on real assets

On March 20, 2024, BlackRock announced the launch of its stablecoin worth 1 dollar and yield-bearing (“yield bearing stablecoin”). Named BUIDL for”BlackRock USD Institutional Digital Liquidity”, it makes it possible to acquire a share in a fund composed mainly of American Treasury bills.

An event that highlights the growing importance of stablecoins in finance.

A leading player in finance and cryptocurrencies

Recall that BlackRock is the largest asset management company in the world. The company manages more than 10 trillion dollars in assets, which is more than three times France's GDP. It is located mainly in the United States, Europe and Asia, in more than 60 cities across 27 countries, and employs nearly 12,000 people.

At the beginning of 2024, after obtaining regulatory agreements in the United States, the group launched its Bitcoin ETF, which makes it possible to invest in Bitcoin without technical knowledge. 3 months later, this ETF already exceeds 15 billion dollars in assets under management.

The group sees great potential in blockchain technologies applied to finance. On July 6, 2023, its CEO Larry Fink recalled that asset tokenization would revolutionize finance. He even told Bloomberg in January 2024:”Tokenization is the future of finance.”

The BUIDL, a fund made up of real assets

BUIDL is a fund made up of real world assets, or RWA for Real World Assets. The assets are mostly US Treasuries and cash.

The shares of this fund are worth 1 dollar and are tokenized: this means that a token (or token) was created on a blockchain to represent this portion of the fund. The token can then be exchanged or kept easily. Each share of the fund is worth $1 and is represented by the BUIDL stablecoin.

The assets behind the BUIDL are mostly US Treasuries.

The blockchain used for BUIDL is Ethereum, the main global blockchain.

Excerpt from the BlackRock press release dated 20/03/2024 :

“(...) The tokenization of the BUIDL Fund will offer investors significant benefits by allowing ownership to be issued and traded on a blockchain, by expanding investor access to on-chain offerings, by providing instant and transparent settlement, and by allowing transfers between platforms.”

Monthly return

Each BUIDL token is worth 1 USD. That's why it can be thought of as a US dollar stablecoin. But unlike other stablecoins that are intended to facilitate exchanges and payments, the BUIDL token is mainly intended to be retained to generate returns. Interest is paid once a month in the form of additional tokens.

Excerpt from the BlackRock press release:

BUIDL seeks to offer a stable value of 1 USD (US dollar) per token, and pays the dividends accumulated daily directly to investor wallets, in the form of new tokens, every month. The fund invests 100% of its total assets in cash, US Treasuries, and repurchase agreements, allowing investors to earn a return while holding the token on the [Ethereum] blockchain.

A quick reminder 😉:

With the Eco account, you have a solution to invest by simple transfer in euros in euros in stablecoins, receiving a return every day.

Who can invest in BUIDL?

While the stablecoin has been publicly tokenized on the Ethereum blockchain, it is not publicly available.

For the time being, only previously authorized Wallet addresses will be able to acquire BUIDLs. This means that only financial professionals in a contractual relationship with Blackrock can buy or resell BUIDL on behalf of their clients.

Tokenization, a fundamental trend

This revolution in finance has only just begun: the tokenization of real world assets makes it easy to buy and exchange traditional assets by buying tokens that represent shares of these assets.

Almost everything can be tokenized: a solar power plant, wine, wine, an apartment, copper... For five years, this has also been the vision carried out by Tech For Change, the company dedicated to Eco account : offer simple financial services based on blockchains to offer efficient returns on assets with a positive impact.

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