Coinbase has been selected as a vital infrastructure provider for Blackrock’s recently introduced tokenized investment fund, as disclosed by the crypto exchange. Blackrock’s head of digital assets remarked, “This marks the next step in our digital assets strategy. Our focus remains on crafting solutions within the digital assets realm to address tangible challenges for our clientele.”
Coinbase and Blackrock are collaborating on a tokenized investment fund project.
Blackrock, the world’s largest asset manager, introduced its inaugural tokenized fund issued on a public blockchain in partnership with Securitize Markets on Wednesday. Dubbed the Blackrock USD Institutional Digital Liquidity Fund (BUIDL), the fund was unveiled to qualified investors.
On the same day, Coinbase Institutional announced via the social media platform X that it had been chosen to provide essential infrastructure for Blackrock’s new fund. Coinbase emphasized, “This collaboration underscores our dedication to linking institutions with crypto and showcases our capability to deliver the requisite technology and products to bolster the rapidly expanding tokenization sector.”
The BUIDL fund allows qualified investors to earn U.S. dollar yields by subscribing on the blockchain through Securitize Markets. Blackrock explained, “The fund invests 100% of its total assets in cash, U.S. Treasury bills, and repurchase agreements, enabling investors to earn yield while holding the token on the blockchain.” It aims to maintain a stable value of $1 per token and distributes daily accrued dividends directly to investors’ wallets as new tokens each month.
Additionally, Coinbase provides custody services for Blackrock’s bitcoin holdings in the Ishares Bitcoin Trust (IBIT), the world’s largest asset manager’s spot bitcoin exchange-traded fund (ETF). Blackrock has also submitted an application to the Securities and Exchange Commission (SEC) to launch its Ishares Ethereum Trust.
Robert Mitchnick, Blackrock’s head of digital assets, also remarked on Wednesday, stating, “The initial BUIDL ecosystem participants include Anchorage Digital Bank NA, Bitgo, Coinbase, and Fireblocks.” Blackrock Financial Management will serve as the fund’s investment manager, with Bank of New York Mellon acting as the custodian of the fund’s assets and administrator. Securitize will function as Blackrock’s transfer agent and tokenization platform.