BlackRock Innovates with Digital Shares Using Blockchain Technology

BlackRock has submitted a proposal to create digital shares that will mirror ownership of one of its money market funds, utilizing blockchain technology. These digital ledger technology (DLT) shares will track the BlackRock BLF Treasury Trust Fund, which contains over $150 million primarily invested in US Treasury bills and cash. The shares will be available exclusively through BlackRock Advisors and The Bank of New York Mellon, with ownership recorded on a blockchain to enhance transparency. However, these shares will not be tokenized like other digital assets but will serve as a verification tool for ownership records. BlackRock will continue to maintain traditional paper-based ownership records as the official ledger. The firm did not specify a ticker symbol or management fees for these DLT shares. A minimum initial investment of $3 million is required for institutional investors to purchase these digital shares. This initiative follows Fidelity’s recent filing to develop an Ethereum-based share class tracking its Treasury Digital Fund, which is pending regulatory approval. The financial industry is increasingly exploring blockchain for tokenizing treasury securities, bonds, and private credit, with Ethereum being the preferred blockchain for such assets. The market for treasury tokenization is valued at over $6 billion, led by BlackRock’s BUIDL fund, followed by others like Franklin Templeton’s US Government Money Fund. Industry leaders see potential for blockchain-based tokenization to transform investment practices.