BlackRock Creates Fund With Securitize, a Big Player in Real-World Asset Tokenization
The fund was seeded with $100 million in USDC stablecoin using the Ethereum network, blockchain data shows.
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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. ...
... Floki developers are working on offering regulated digital banking accounts that can be funded with FLOKI tokens and used to transact in USD, EUR, and GBP. ...
BlackRock today unveils its first tokenized fund issued on a public blockchain, the BlackRock USD Institutional Digital Liquidity Fund (“BUIDL” or the “Fund”). BUIDL will provide qualified investors with the opportunity to earn U.S. dollar yields by subscribing to the Fund through Securitize Markets, LLC.
“This is the latest progression of our digital assets strategy,” said Robert Mitchnick, BlackRock’s Head of Digital Assets. “We are focused on developing solutions in the digital assets space that help solve real problems for our clients, and we are excited to work with Securitize.”
Tokenization remains a key focus of BlackRock’s digital asset strategy. Through the tokenization of the Fund, BUIDL will offer investors important benefits by enabling the issuance and trading of ownership on a blockchain, expanding investor access to on-chain offerings, providing instantaneous and transparent settlement, and allowing for transfers across platforms. BNY Mellon will enable interoperability for the Fund between digital and traditional markets.
“Tokenization of securities could fundamentally transform capital markets. Today’s news demonstrates that traditional financial products are being made more accessible through digitization. Securitize is proud to be BlackRock’s transfer agent, tokenization platform and placement agent of choice in digitizing and expanding access to its investment products,” said Securitize co-founder and CEO Carlos Domingo.
BUIDL seeks to offer a stable value of $1 per token and pays daily accrued dividends directly to investors' wallets as new tokens each month. The Fund invests 100% of its total assets in cash, U.S. Treasury bills, and repurchase agreements, allowing investors to earn yield while holding the token on the blockchain. Investors can transfer their tokens 24/7/365 to other pre-approved investors. Fund participants will also have flexible custody options allowing them to choose how to hold their tokens.
The initial ecosystem participants in BUIDL include Anchorage Digital Bank NA, BitGo, Coinbase, and Fireblocks, among other market participants and infrastructure providers in the crypto industry.
BlackRock Financial Management, Inc., will be the investment manager of the Fund and Bank of New York Mellon will serve as the custodian of the Fund’s assets and its administrator. Securitize will act as a transfer agent and tokenization platform, managing the tokenized shares and reporting on Fund subscriptions, redemptions, and distributions. Securitize Markets will act as placement agent, making the Fund available to eligible investors. PricewaterhouseCoopers LLP has been appointed as the Fund's auditor for the period ending December 31, 2024.
The Fund will issue shares pursuant to Rule 506(c) under the Securities Act of 1933 and Section3(c)(7) of the Investment Company Act. The Fund’s initial investment minimum is $5 million.
BlackRock has also made a strategic investment in Securitize. As part of the investment, Joseph Chalom, BlackRock’s Global Head of Strategic Ecosystem Partnerships, has been appointed to Securitize’s Board of Directors.
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On Thursday, Ripple CEO Brad Garlinghouse responded to a post on Twitter from Coinbase Chief Legal Officer Paul Grewal on the issue of ETH-spot ETFs, saying,“The SEC picked fights with the industry and is losing badly in the Courts. They’re now fighting fellow regulators like the CFTC and falling behind international counterparts. At what point will the SEC realize they will lose the war against ETH just as they lost against XRP?”
Notably, Grewal referenced the William Hinman speech. Hinman said that Bitcoin (BTC) and Ethereum (ETH) were not securities in 2018. Grewal also highlighted Gensler testimony on Capitol Hill, where the SEC Chair said, on oath, that ETH is not a security.
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The London Stock Exchange has announced that it will accept applications for the admission of Bitcoin Crypto Exchange-Traded Notes (ETNs) starting from April 8, 2024. This decision follows the Exchange's earlier notice on March 11, indicating its intention to allow the trading of Crypto ETNs in the second quarter of the year.
Subject to approval by the Financial Conduct Authority (FCA) of the base prospectuses, the Exchange plans to commence trading of these ETNs on Tuesday, May 28, 2024. This move is aimed at ensuring maximum issuer participation on the first trading day and allowing issuers sufficient time to prepare their documentation and meet regulatory requirements.
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1. Further to Stock Exchange Notice N02/24, published on 11 March 2024, in which the London Stock Exchange (the "Exchange") announced it would accept applications for the admission to trading of Bitcoin and Ethereum Crypto ETNs in the second quarter of 2024, we can confirm that applications can be made from 8 April 2024.
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“Dips in #Bitcoin keep on getting shorter and shorter. Meanwhile, rallies are lasting longer and moving quicker,” said analysts for The Kobeissi Letter. “This is a textbook sign that shorts are being squeezed as we hit fresh all-time high territory.”
Because of this, the analysts warned that Bitcoin may be setting up for a short squeeze.
“Currently, the gap between institutional longs and hedge fund shorts is at a record high,” they said. “While hedge funds hold nearly 15,000 in net short contracts, institutions hold nearly 20,000 in net longs.”
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Based on analysis from crypto market intelligence firm CryptoQuant, the pressure on shorts is likely to continue moving forward as the Bitcoin market continues to move closer to a liquidity crisis.
“Bitcoin demand has soared to unprecedented levels this year. We estimate monthly Bitcoin demand has increased from 40K Bitcoin at the start of 2024 to 213K Bitcoin as of the time of publishing,” the firm said in its latest Weekly Crypto Report. “An important factor behind this demand growth is ETF buying, but as of late other large investors have also increased their Bitcoin allocation.”
“On the supply side of the equation, the total Bitcoin readily available for selling continues to decline,” they noted. “The total ‘visible’ amount of Bitcoin at key entities stands at 2.7 million Bitcoin, down from an all-time high of 3.5 million Bitcoin in March 2020.”
“Record Bitcoin demand paired with declining sell-side liquidity has resulted in the liquid inventory of Bitcoin plunging to its lowest ever in terms of months of demand,” the report said. “We estimate that the present Bitcoin sell-side liquidity inventory is only enough to cover the current rate of demand growth for six to twelve months. A declining liquid inventory would support higher prices.”
There is even less liquidity available when exchanges outside of the U.S. are excluded from the calculation.
“The Bitcoin liquid inventory drops to six months of demand if we exclude the Bitcoin on exchanges outside the US,” the report said. “We exclude these exchanges considering that US spot Bitcoin ETFs will only source Bitcoin from US entities.”
According to CryptoQuant founder and CEO Ki Young Ju, sell-side liquidity is now “much lower” than it has been historically relative to demand. ...
TLDR: The SEC recently asked for comments on the potential approval of ether ETF applications, seeking information on whether Ethereum’s Proof of Stake (PoS) raises “unique concerns” of fraud and manipulation that the agency should consider. We filed a comment letter in response explaining why such concerns are wholly without merit. In fact Ethereum’s PoS implementation meets and even exceeds the security of Bitcoin’s Proof of Work (PoW), which underlies bitcoin-based ETFs that have already been approved for trading by the SEC.
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The final SEC deadline for approving or denying the next round of spot ETH ETF applications will come on May 23, starting with VanEck’s investment vehicle. Though many experts seemed to be optimistic about approval in 2023, some have suggested going into 2024 that the commission could deny applications.
Several firms have spot ETH ETF applications pending approval or denial, including Fidelity, Hashdex and ARK 21Shares. The SEC began approving investment vehicles tied to Ether futures in October 2023.
Crypto gamblers are placing bets on whether spot Ether ETFs will be approved by the United States SEC before May 31. The overall bets on the ETF outcomes have reached at least $12 million on the predictions market. The SEC eventually approved the trading and listing of 11 spot Bitcoin ETFs on Jan. 10.
Investment management company Grayscale has expressed confidence in a favorable decision by the SEC for spot Ether ETFs by May. On March 25, Grayscale chief legal officer Craig Salm said that the SEC’s perceived “lack of engagement” with applicants does not indicate whether an ETF will be approved.
... Bitcoin is not an asset to hold; it is a currency to use. ...
Hong Kong regulators are likely to approve the first set of applications for spot bitcoin exchange-traded funds (ETF) next week, making it possible that the products could be ready to start trading in April, Reuters reported, citing two people familiar with the matter.
Australia and Hong Kong are the two jurisdictions that could become the first in Asia to offer spot bitcoin ETFs, with Singapore and the UAE not reflecting immediacy just yet.
Hong Kong's regulators have sped up the approval process, Reuters said, citing one of the people.
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Hong Kong, one of the world’s leading financial centers and a gateway for outbound Chinese investments, is set to approve a spot bitcoin exchange-traded fund tied to bitcoin (BTC).
The investment vehicle could unlock up to $25 billion in demand from Chinese investors via the Southbound Stock Connect program, according to Singapore-based crypto services provider Matrixport. The Southbound Stock Connect allows qualified mainland Chinese investors to access eligible shares listed in Hong Kong.
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The largest federal bank in Germany, Landesbank Baden-Wurttemberg, is planning to offer cryptocurrency custody services in the second half of 2024, according to a new report.
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Says Jürgen Harengel, managing director of corporate banking at Landesbank Baden-Württemberg,
“The demand from our corporate customers for digital assets is increasing.”
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Meanwhile, Deutsche Bank and DZ Bank, Germany’s second-largest bank, are also preparing for crypto services as Europe’s Markets in Crypto-Assets (MiCA) regulation takes full effect in December 2024. ...
Bitcoin ETF provider Grayscale has provided some details of its spin-off fund, the Bitcoin Mini Trust (BTC), including a more competitive 0.15% fee than the uplisted mothership GBTC product, according to a pro forma financials in its latest filing.
The filing also provides an illustrative example of the amount of Bitcoin (BTC) Grayscale will contribute to the mini fund: 63,204 bitcoin, or 10% of existing assets in GBTC, as per the filing. Shares of the BTC trust are to be issued and distributed automatically to holders of GBTC shares. (Pro forma financial statements are projections of future expenses and revenues, based on a company's past experience and future plans.)
Grayscale’s Bitcoin Mini Trust was conceived to offer GBTC investors a lower fee option that’s more competitively in line with other bitcoin ETFs approved back in January.
This spinoff is also considered a non-taxable event for GBTC’s existing shareholders, so those investors will not be expected to pay capital-gains tax to automatically transfer into the new fund. Some early stage GBTC investors with gains in the thousands of percentages would face a significant taxable event to switch to a competitor product with a lower fee.
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