Welcome to the March edition of our monthly State of Tokenization, where we explore the latest news about how blockchain technology is shaping the financial landscape. March prominently saw major players launch high-profile initiatives. BlackRock launched its first tokenized fund, while industry giants such as BNY Mellon, Oliver Wyman, and Goldman Sachs joined forces in a collaborative blockchain test. In parallel, the HSBC Euro Liquidity Fund was tokenized by the company Moreliquid, highlighting the growing interest in leveraging blockchain for easier management and higher liquidity. Let’s have a deeper look:
BlackRock issued its first tokenized fund, the BlackRock USD Institutional Digital Liquidity Fund (BUIDL), built on the Ethereum network, in collaboration with Securitize. By tokenizing the fund, BlackRock enabled investors to access on-chain offerings, ensuring instantaneous and transparent settlement.
BUIDL aims to provide investors with a value of $1 per token while offering daily dividends directly to investors’ wallets. The Fund also provides investors with flexible custody options, empowering them to choose how they hold their tokens. The initial investment minimum is $5 million.
The ecosystem around BUIDL includes blockchain household names such as Coinbase and Fireblocks, among others, ensuring use of the best possible technology. The fund was tokenized using Securitize’s tokenization platform. BlackRock Financial Management, Inc., will act as the investment manager of the Fund, while Bank of New York Mellon will act as the custodian of the Fund’s assets and administrator.
With other players such as JPMorgan and Citi already exploring tokenization, it was only a matter of time before BlackRock began its journey towards digital assets. [1]
Speaking of which, Digital Asset – another player in the financial blockchain industry – completed a series of tests of its Canton Network, with participants such as BNY Mellon, Oliver Wyman, and Goldman Sachs. Canton Network aims to bring financial market participants into one network, connecting banks and financial institutions. Players can interoperate and transact tokenized assets while dealing with fund registries and digital cash, among other things.
Over the period, participants simulated over 350 transactions, using different decentralized applications for fund registries, bond registries, trading, and more, to exchange tokenized securities, money market funds, and deposits across applications.
The initiative involved 13 banks, 15 asset managers and 4 custodians, among others, demonstrating how blockchain technology can facilitate financial transactions and boost interoperability among industry players, all within a safe regulatory environment. [2]
Moreliquid, a digital securities investment platform, partnered with Tokeny to tokenize the HSBC Euro Liquidity Fund with the introduction of the Moreliquid Money Market EUR (MMMEUR) token.
The MMMEUR, regulated under Luxembourg jurisdiction, tracks the price of the HSBC Euro Liquidity Fund, and targets institutional and high-net-worth investors, with a minimum investment amount of €100,000. It offers monthly coupon payments, providing investors exposure to a diversified portfolio of short-term securities. The MMMEUR token can be transferred and used as collateral for loans, enhancing its utility and liquidity. [3]
It was issued under the ERC3643 token standard, a reliable solution for tokenizing financial assets requiring stringent compliance. You can read more about why NYALA believes in this token standard here.
Overall, this month was marked by very large financial players actively embracing blockchain-related initiatives, creating yet another signal towards the widespread adoption of blockchain within the financial landscape.
1 BlackRock Launches Its First Tokenized Fund, BUIDL, on the Ethereum Network
2 Global banks participate in large-scale blockchain pilot test
3 Moreliquid Partners with Tokeny to Tokenize HSBC Euro Liquidity Fund
