What Is BlackRock’s BUIDL Fund? A Beginner’s Guide To Tokenized Money Markets

Key Takeaways

• BlackRock’s BUIDL brings U.S. Treasuries on-chain through tokenization.
• BUIDL pays daily interest, backed 1:1 by real-world assets.
• Only accredited investors can access BUIDL through Securitize.
• BUIDL runs on Ethereum, Solana, Polygon, and other networks.

Traditional finance (TradFi) and decentralized finance (DeFi) are increasingly converging. 

Since its inception, DeFi has drawn on core TradFi concepts to build a parallel financial system on blockchain rails.

Now, TradFi meets DeFi systems are discovering meeting points—shared spaces where traditional structure blends with blockchain innovation.

As blockchain technology advances and adoption grows, large institutions are integrating DeFi tools into their systems to offer more flexible options powered by blockchain.

One of the most notable moves comes from BlackRock, the world’s largest asset manager. With its BUIDL BlackRock signals that the future of finance may run on both centralized and decentralized infrastructures.

This article covers BlackRock’s BUIDL product, explains the basics of tokenized money markets, and explores how the fund operates across Ethereum and other blockchain networks.

Blackrock’s BUIDL Fund, Explained

BUIDL stands for the BlackRock USD Institutional Digital Liquidity Fund. BUIDL is a tokenized money market fund (MMF) run by BlackRock. Securitize, LLC, a registered transfer agent, manages the fund’s tokenization or issuance, compliance, and trading of BUIDL tokens.

BUIDL marks a major step in bridging TradFi with fintech because it transforms traditional MMF into a digital format using blockchain technology.

What Are Tokenized Money Market Funds?

Tokenized money market funds (MMFs) are traditional low-risk assets—like U.S. Treasury bills and cash—represented as digital tokens on a blockchain. Each token corresponds to a share of the fund, allowing investors to buy fractional portions. This makes it easier to access these funds with less capital, opening the door to broader participation.

They offer the same benefits as traditional MMFs—low-risk investments that aim to preserve capital and provide steady returns, with added advantages from blockchain technology:

• Smaller entry points: Investors can buy fractional fund shares, lowering the capital needed to participate
• Automated processes: Smart contracts pay interest, handle withdrawals, and manage compliance checks, cutting down on manual work.
• DeFi compatibility: Investors can use the tokens as collateral in DeFi platforms, expanding their utility beyond traditional markets.
• On-chain yield: BUIDL pays daily interest directly to crypto wallets, offers near-instant transaction settlement, full transparency, and 24/7 accessibility.

How BUIDL Works On The Ethereum Network

BUIDL originally launched on Ethereum, but has since expanded to multiple blockchains , including Aptos, Arbitrum, Avalanche, Optimism, Polygon, and most recently, Solana.

To support multi-chain access, BUIDL uses Wormhole, a cross-chain messaging protocol. Wormhole lets BUIDL tokens move between different blockchains.

BUIDL tokens are easy to track, transfer, and manage on-chain.

This is how this on-chain investing model works:

• Tokenized shares: Each token equals one share in the fund and is recorded on the blockchain.
• Smart contract automation: Smart contracts pay interest daily, handle redemptions (meaning investors can cash out their tokens for U.S. dollars), and manage other tasks with no manual work.
• Wallet-based access: Investors hold their tokens in crypto wallets they control.
• Redemptions in USD: While investors often use USDC to buy BUIDL tokens, redemptions are usually paid out in U.S. dollars. The smart contract handles the process of selling tokens back to the fund and receiving the equivalent cash value.
• On-chain transparency: Every token movement and transaction is public and verifiable on the blockchain.
• Daily dividend accrual: The fund earns interest each day and pays it out as new tokens at the beginning of each month.
• Flexible custody: Investors can choose where to keep their tokens using providers like Anchorage Digital Bank NA, BitGo, Coinbase, or Fireblocks.
• USDC-backed assets: Each BUIDL token is designed to maintain a $1 value, fully backed by U.S. Treasury bills, cash, and repurchase agreements. To invest, users must be verified by Securitize and use USDC for purchases.

Inside BUIDL’s Real-World Asset Ecosystem

BUIDL brings real-world assets (RWA)  (like U.S. Treasuries and cash) onto the blockchain through tokenization. 

To make it possible, BlackRock connects with a network of trusted partners and tools—each playing a specific role. 

The chart below shows how BUIDL works from issuance to custody, highlighting how traditional finance and blockchain infrastructure come together:

Benefits For Investors And Institutions

BUIDL brings money market funds on-chain, reshaping access, control, and efficiency in a regulated environment. As a result, it offers clear advantages that go beyond traditional platforms.

• Faster payouts: The fund adds interest daily. Investors see their returns without delays.
• More control: Investors can hold their tokens directly or pick a trusted custodian.
• Easy tracking: Tokens sit in the same wallet as other digital assets, so everything stays in one place.
• Lower risk exposure: BUIDL connects to safe assets like U.S. Treasuries—but as tokens.

• Chain flexibility: BUIDL runs on multiple blockchains, so users can stay on the network they prefer.
• Built for compliance: BlackRock and Securitize follow U.S. rules, making it easier for institutions to take part.

Who Can Invest In BUIDL: Accredited Access and Strict Compliance

BUIDL runs under strict rules. The fund follows U.S. securities laws and is only open to accredited and institutional investors. Transfers are limited to wallets that pass know-your-customer (KYC) checks and appear on an approved whitelist. 

Securitize Markets manages investor access to the fund. To join the whitelist, individuals typically must qualify as Qualified Purchasers—often requiring a minimum investment of $5 million. The fund is registered with the U.S. SEC.

This setup shows a strong focus on meeting regulatory standards, including anti-money laundering (AML) rules and secure custody.

BUIDL Vs. Franklin Vs. Ondo: On-Chain Treasury Fund Comparison

BlackRock’s BUIDL is part of a growing field of tokenized funds. While all aim to connect traditional finance with blockchain tech, they differ in how they’re built, what they hold, and who they serve.

Below is a comparison of three widely known offerings — BlackRock’s BUIDL, Franklin Templeton’s OnChain U.S. Govt MMF, and Ondo Finance’s OUSG — highlighting how each fund bridges traditional finance with blockchain infrastructure.

Is BUIDL Safe?

BlackRock’s BUIDL fund is considered one of the more secure ways to access yield on-chain, thanks to its combination of traditional finance safeguards and blockchain transparency. 

Each BUIDL token is fully backed by real-world assets like U.S. Treasury bills, cash, and repurchase agreements—low-risk instruments commonly used in money market funds. 

The fund is registered with the U.S. SEC, ensuring it follows strict regulatory standards. To invest, users must be verified as Qualified Purchasers through Securitize, with access limited to whitelisted wallets that meet KYC and AML requirements. 

The custody of the tokens is handled by leading institutional providers such as Anchorage, BitGo, Coinbase, and Fireblocks. Additionally, BUIDL operates on public blockchains like Ethereum, Solana, and Polygon, allowing for real-time transparency into token supply and transactions. 

While not risk-free, BUIDL sets a new benchmark for safety and compliance in the tokenized real-world asset space.

Conclusion

BlackRock’s move reflects more than just confidence in tokenized finance. It is a real-world example of how blockchain can support low-risk, yield-generating investments without sacrificing the structure and oversight that traditional finance requires. 

The fund’s design, backed by real assets, and use of smart contracts mark a turning point in how institutions engage with digital assets. 

The question is, does it respond to the decentralization aims of the crypto movement—or is it the rise of institutional DeFi, where traditional control meets blockchain rails without changing who holds the power?

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