BlackRock, the world’s largest asset manager, continues to expand its crypto footprint. On Tuesday, the firm’s technology partner Securitize announced that BlackRock is adding its blockchain-based money market fund to Solana, the fast-growing Ethereum challenger. The move comes a year after the finance giant launched the BlackRock USD Institutional Digital Fund. BUIDL takes traditional money market funds—which serve as short-term places to park cash and earn yield—and combines it with the ledger and payment properties of blockchain.
Crypto-savvy investors can park their BUIDL funds now on seven blockchains, including Solana. Initially launched on Ethereum, BlackRock’s tokenized money market fund has attracted a steady inflow of capital.
This comes as part of a broader push in the financial sector to embrace tokenization, a term that describes taking financial assets that exist “off chain,” like paper bonds or stocks, and recording their existence “on chain,” or on a blockchain. BUIDL has accrued $1.7 billion—in cash and Treasury bills—as of Tuesday and will cross $2 billion in early April, said a spokesperson for Securitize.
“We’re making them unboring,” Michael Sonnenshein, COO at Securitize, told Fortune, in reference to money market funds. “We are advancing and leapfrogging some of the quote-unquote deficiencies that money markets may have in their traditional formats.”
In “traditional formats,” traders can only buy and sell money market funds during business hours. But crypto markets are live 24 hours a day, seven days a week, and investors need to quickly exit or enter positions.
Crypto markets are also volatile, and traders often need a safe haven to protect themselves from sudden up or downswings. Historically, traders have used stablecoins, which are designed not to fluctuate, as a cash equivalent. The tokens also don’t require holders to go from cryptocurrency to fiat.
However, the most popular stablecoins, USDT and USDC, don’t provide holders yield. That’s why firms like BlackRock have launched interest-bearing products on blockchains. Franklin Templeton, another titan of traditional finance, has released its own blockchain-based money-market fund. And Figure Markets, launched by SoFi founder Mike Cagney, recently announced that it had received approval from the Securities and Exchange Commission for an interest-bearing stablecoin.
“Our vision for why on-chain finance adds more value is because you can do more things with those assets on chain than you could if [they’re] sitting in your brokerage account,” Lily Liu, president of the Solana Foundation, told Fortune.
BlackRock’s expansion of BUIDL comes as the asset manager increasingly dips its toes into the crypto markets. In January 2024, it launched a spot-Bitcoin exchange-traded fund, which has since attracted almost $40 billion, according to crypto analytics firm SoSoValue.
“ETFs are step one in the technological revolution in the financial markets,” Larry Fink, BlackRock’s CEO, told CNBC in January. “Step two is going to be the tokenization of every financial asset.”
