BlackRock Creates Fund With Securitize, a Big Player in Real-World Asset Tokenization

Investment management giant BlackRock (BLK) has created a fund called the BlackRock USD Institutional Digital Liquidity Fund, according to a document filed with the U.S. Securities and Exchange Commission (SEC).

The fund, incorporated in the British Virgin Islands, will be launched in partnership with asset tokenization firm Securitize.

The filing does not reveal what assets the fund will hold, but Securitize's presence potentially suggests the product has something to do with the tokenization of real-world assets, or RWA – industry jargon for representing ownership of a wide range of assets through a token on a blockchain. After BlackRock's filing came out, Ondo Finance's native token ONDO jumped as much as 20%, and is up 12% over the past 24 hours outperforming the broad-market CoinDesk 20 Index (CD20) and bitcoin (BTC). Ondo runs a RWA platform.

Observers pointed to blockchain data showing $100 million of Circle's USDC stablecoin on the Ethereum network was moved to an address related to a Securitize deployer, which could potentially be a seed investment into the fund – though that's not certain.

The move follows BlackRock's foray into digital asset funds, listing a spot-based bitcoin (BTC) exchange-traded fund (ETF) in January, which amassed over $15 billion of assets under management. The company also filed for a spot ether (ETH) ETF last year.

BlackRock CEO Larry Fink said in a January interview with CNBC that BTC and ETH ETFs "are just stepping stones towards tokenization and I really do believe this is where we're going to be going."

Tokenization of real-world assets is a growing sector in the intersection of digital assets and traditional finance that involves placing traditional assets on blockchain rails in pursuit of faster settlements and increased efficiency.

UPDATE (March 19, 2024, 21:15 UTC): Revises headline, adds context that the filing doesn't specify what type of assets it will hold.