Circle introduces a new trading mechanism for tokenized BlackRock fund shares using USDC

Circle’s latest smart contract facilitates the exchange of stablecoin for shares held by investors in the BlackRock USD Institutional Digital Liquidity Fund.

The first tokenized fund from BlackRock is currently available for holders to transfer for USDC. Circle, the issuer of stablecoins, said on Wednesday that the new smart contract capability would make secondary market transfers feasible. The people selling the shares will be able to keep their digital currency this way.

Following last month’s introduction of BUIDL (BlackRock USD Institutional Digital Liquidity Fund), Circle has introduced its new offer.

Securitize Markets, a firm specializing in tokenizing real-world assets, was an affiliate of the biggest asset manager in the world, which manages around $10 trillion in assets. Qualified investors may get US dollar dividends by subscribing to the fund.

Robert Mitchnick, who heads digital assets at BlackRock, called the new offering “the next step of our digital assets strategy.”

Traditional financial circles have been increasingly interested in tokenizing physical and financial assets over the last year or two. This involves creating digital tokens that reflect things like real estate or debt instruments and then distributing them on a blockchain.

In February, Citi, a major American bank, tokenized a Wellington Management private equity fund as a proof of concept. After tokenizing money market fund shares in October, JPMorgan, another established participant in the financial industry, used a decentralized application to help BlackRock and Barclays complete a collateral transaction.

In a Thursday statement, Circle co-founder Jeremy Allaire addressed several concerns raised by investors by saying that tokenizing assets provides a solution.

“USDC allows investors to quickly exit tokenized assets, which reduces costs and eliminates friction,” Allaire further said. “We’re ecstatic to bring the fundamental advantages of blockchain transactions to BUIDL investors via the availability of USDC and to give them this capability.”

In 2022, BlackRock CEO Larry Fink referred to tokenized securities as “the next generation for markets.” Fink had already praised the potential of tokenized securities.

After releasing a spot bitcoin ETF to the market in January, the massive asset manager introduced BUIDL. The iShares Bitcoin Trust (IBIT), a fund managed by BlackRock, has amassed $18.5 billion in assets as of Wednesday’s market close, making it the fastest-growing new exchange-traded fund (ETF) of all time.

Also Read: Voyager obtains $484 million to repay creditors in bankruptcy