Circle debuts way to trade BlackRock tokenized fund shares for USDC

Circle’s new smart contract to allow holders of BlackRock USD Institutional Digital Liquidity Fund to redeem shares for its stablecoin

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Holders of BlackRock’s first tokenized fund will now be able to transfer their shares to receive USDC.

Transfers will be possible on the secondary market via new smart contract functionality, stablecoin issuer Circle said Wednesday. This will allow sellers of the shares to remain holders of digital dollars.  

Circle’s new proposition comes after BlackRock launched its BlackRock USD Institutional Digital Liquidity Fund, also known as BUIDL, last month. 

The offering from the world’s largest asset manager — with roughly $10 trillion under its control — was designed to allow qualified investors to earn US dollar yields by subscribing to the fund via Securitize Markets, a company focused on tokenizing real-world assets.

Read more: Who’s the better bitcoin salesman: Larry Fink or Michael Saylor?

Robert Mitchnick, BlackRock’s head of digital assets, said the new product marked “the latest progression of our digital assets strategy.”

Tokenizing physical and financial assets — issuing digital representations of real estate or debt securities, for example, on a blockchain — has gained more steam in traditional finance circles over the past year or so. 

A proof of concept by banking giant Citi in February tokenized a private equity fund issued by Wellington Management. Fellow traditional finance player JPMorgan used a decentralized application in October to facilitate a collateral transaction between BlackRock and Barclays after tokenizing shares of a money market fund.

Read more: Citi the latest TradFi player to test out asset tokenization

Circle co-founder Jeremy Allaire said in a Thursday statement that tokenizing assets solves for various investor pain points. 

USDC enables investors to move out of tokenized assets at speed, lowering costs and removing friction,” Allaire added. “We’re thrilled to provide this functionality to BUIDL investors and deliver the core benefits of blockchain transactions via USDC availability to investors.”

BlackRock CEO Larry Fink had previously touted the potential of tokenized securities — in 2022 calling it “the next generation for markets.”

The asset management giant launched BUIDL after bringing to market a spot bitcoin ETF in January. 

That BlackRock fund — the iShares Bitcoin Trust (IBIT) — is the fastest-growing new ETF of all time, reaching $18.5 billion in assets under management as of market close Wednesday. 


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