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BlackRock’s BUIDL Makes History as First Tokenized Treasury Fund to Top $500M

Last Updated 6 days ago
James Morales
Last Updated 6 days ago
By James Morales
Verified by Insha Zia

Key Takeaways

  • BlackRock’s BUIDL has surpassed $500 million in assets under management.
  • Since its launch in March, BUIDL has emerged as the largest tokenized treasury fund.
  • Tokenized funds have gained ground in 2024 but still account for just a fraction of the overall market.

Money market funds have been among the more successful applications of securities tokenization to date, being championed by big-name asset managers like Franklin Templeton and BlackRock. 

Marking a significant milestone for the industry, BUIDL, BlackRock’s flagship tokenized treasury fund, recently surpassed $500 million in assets under management (AUM), making it the first on-chain investment fund of any kind to exceed half a billion dollars.

Tokenization Gains Ground

While tokenized securities have been the next big thing in FinTech since at least 2021, BlackRock’s arrival on the scene with the launch of BUIDL in March was a watershed moment for the industry. 

By May, BUIDL had matched the AUM of the previous market leader, Franklin Templeton’s FOBXX. At the time, the total value of all tokenized treasury funds climbed above $1 billion for the first time. 

Since overtaking FOBXX, BUIDL has continued to gain market share. At the time of writing, it accounted for over 28% of the overall market for tokenized money market funds.

A $6 Trillion Opportunity

With tokenized treasuries attracting tens of millions of dollars in capital each week, BUIDL and its peers are edging in on a market dominated by some of the biggest investment funds in the world. 

Chart showing growth of Tokenized US Treasury Funds.
Tokenized US Treasury Funds. Source: RWA.xyz.

According to the Investment Company Institute, the total value of assets  held in money market funds stood at $6.15 trillion as of July 2. Against that backdrop, the $1.8 billion invested in tokenized funds represents just a drop in the ocean.

While the rate of adoption has picked up significantly in 2024, key challenges must be overcome before tokenized securities become the norm,

Obstacles to Further Adoption

Despite significant advancements in blockchain interoperability in recent years, the seamless multi-chain infrastructure needed to maximize liquidity for tokenized funds is still emerging.

As things stand, BUIDL is deployed on Ethereum, FOBXX on Ripple and Polygon, and a group of smaller funds are spread across other Layer-1 blockchains. Looking beyond treasury funds to the wider market for tokenized real-world assets, an even more diverse selection of specialized and generic chains is in use.

Another major hurdle slowing the growth of security tokens is the lack of an appropriate regulatory framework for stablecoins.

Although BlackRock and other asset managers have successfully melded blockchain technology with traditional, fiat-based payment infrastructures, it is an awkward fit that doesn’t realize the full potential of tokenization. 

Integrating stablecoins could bring new efficiencies to the asset management industry, enabling innovations such as smart contracts that automate portfolio rebalancing.

In Europe, regulatory progress in the EU and the UK has laid the groundwork for this integration. But in a divided Congress, progress on stablecoin legislation in the US has been slow.

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