- BlackRock and its technology partner Securitize have announced their blockchain money market fund will now expand to Solana.
- The Blackrock USD Institutional Digital Fund (BUIDL) provides traditional investors with the opportunity to earn yield through blockchain ecosystems.
- BUIDL has recently reached US$1.7B in cash and treasury bill holdings and is projected to reach US$2B in early April.
- BUIDL signifies growing interest by large TradFi entities in the financial benefits that blockchain technology can generate.
BlackRock’s technology partner Securitize announced the news that the BUIDL fund will expand to popular blockchain Solana (SOL), which has been a Layer-1 competitor to Ethereum (ETH). This announcement highlights BlackRock’s continued expansion into the blockchain industry.
What is BUIDL and Why Expand to Solana?
Traditional money market funds are often used as a place to temporarily store cash and earn a yield. However, with crypto often offering more competitive yields than TradFi can compete with, BUIDL has the option of expanding the money market funds to integrate with blockchain technology. This can present the opportunity to earn higher yields on available funds.
Furthermore, crypto markets operate 24/7 unlike traditional markets, giving investors a greater breadth of opportunities to capitalise upon. Crypto markets also allow for greater freedom for investors to react to events such as the news, since there is no need to wait for the markets to open, as is the case with traditional markets.
With the expansion into Solana, BUIDL now offers investors seven different blockchains in which they can ‘park’ their BUIDL funds. BUIDL was launched in March of 2024, initially just on Ethereum. However, BUIDL then expanded to include Aptos, Arbitrum, Avalanche, Optimism and Polygon.
Related: Berkshire Hathaway Backed Nubank Expands Crypto Offerings to Include Cardano, Near Protocol, Cosmos and Algorand
Solana has been one of the best performing digital assets in recent years, with much of this success attributed to its low cost when hosting large volumes of transactions.
Solana is uniquely positioned to drive the next wave of adoption for tokenised real-world assets due to the network’s speed, low costs, and active developer ecosystem.
Lily Liu, President of the Solana Foundation.BUIDL holds a 34% market share, which puts it in the position of leading the tokenised US Treasury sector.
The Continuation of TradFi Exploring Digital Assets
Black Rock made world headlines when their Bitcoin ETF was approved by the SEC in January 2024. CEO Larry Fink’s comments at the time marked a significant moment:
ETFs are step one in the technological revolution in the financial markets. Step two is going to be the tokenisation of every financial asset.
Larry Fink, CEO of BlackRock.This latest expansion by BUIDL highlights an innovative approach, whereby the transition of traditional funds and assets into real-world asset tokenisation can be further explored.
Related: Tokenised US Treasuries Market Soars 164% to Surpass $2 Billion, Led by BlackRock’s BUIDL
Some projections estimate that real-world asset tokenisation is projected to reach US$16 trillion (AU$25.35 trillion) by 2030, which would represent 10% of global GDP. This staggering figure conveys the enormous growth potential of this industry and highlights the significance of BUIDL’s announcement.
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