BlackRock, the planet’s biggest asset manager, has submitted to the U.S. Securities and Exchange Commission a prospectus to sell digital shares of its $150 billion Treasury Trust Fund.
These tokenized shares will be called “DLT shares” and will be tradable only with financial custodian BNY Mellon.
DLT shares use distributed ledger technology to track ownership digitally. The filing, submitted on April 29, confirms that blockchain will not power the fund’s investments but will help record ownership.
BlackRock clarified that this system will serve as a mirror record, not a blockchain-native platform.
The initial minimum is $3 million for institutions. There are no minimums in subsequent investments of the DLT shares. BlackRock’s Liquidity Funds group, which encompasses the Treasury Trust Fund, had assets of around $150.1 billion on April 29.
This is a step following CEO Larry Fink’s frequent backing of blockchain and tokenization. In a letter to investors just weeks ago, he stated, “Tokenization will revolutionize investing.” He believes it has the power to cut out settlement delays, free up trapped capital, and allow continuous trading.
Tokenized assets also stand to increase access, according to him. Fractional ownership, voting rights on the blockchain, and democratized yields stand to revolutionize the way that people invest. “Markets wouldn’t need to close,” he observed. “Transactions that today take days to settle will settle in seconds.”
BlackRock leads finance shift toward tokenization
Fink did also warn that verification of identity is still a stumbling block. But until there is adequate infrastructure in place, tokenized assets cannot be fully scaled. However, once that is resolved, tokenized funds will be as ubiquitous as ETFs, he foresaw.
BlackRock does not stand alone in making this leap. Traditional finance industry giants such as JPMorgan, Franklin Templeton, and State Street have already employed blockchain to launch tokenized funds or pilot similar technology.
At the same time, London-based company Calastone has partnered with Fireblocks to enable any fund to be tokenized on its platform. This is a sign of larger trends in global finance.
Nonetheless, BlackRock’s filing represents a milestone in the industry’s acceptance of blockchain. If approved, it will establish a template for institutional investors’ engagement with tokenized money market funds.
