The launch of the BUIDL token by BlackRock immediately captured the investment world's attention. It has already taken the top spot in capitalization, surpassing the Franklin OnChain U.S. Fund. BUIDL offers investors not only participation in a fund with guaranteed monthly dividends credited directly to their crypto wallets but also a next-generation security. Thanks to blockchain, BUIDL is not just an investment but also a means for transparent operations in the securities market.
What does this fund offer?
By turning to the fund, investors receive the BUIDL token equivalent to the American dollar at a 1:1 ratio. This allows the fund to invest in stable assets such as U.S. Treasury bills and REPO operations, providing investors with income from holding the token.
Why is it important?
BlackRock's digital strategy, focused on tokenizing real assets, opens the door for investors to the securities market using blockchain technologies. Transparency and the possibility of receiving regular payments directly to a crypto wallet make this offering particularly attractive.
Prospects and Challenges
Evaluating the future of the fund, it's essential to understand its potential advantages and limitations. Using blockchain presents exciting possibilities, but access to such funds is limited: only to "qualified buyers" with significant investments (from $5,000,000).
Securities with restricted access have requirements for transfer and sale, which hampers widespread distribution and trading on cryptocurrency exchanges.
Currently, the prospect of including such tokenized assets like BUIDL on cryptocurrency exchange lists or their application in well-known DeFi protocols seems not so near. However, the future may bring changes. The development of regulatory norms and blockchain technologies promises to expand opportunities for more investors. This sector of tokenization is only taking its first steps, yet forecasts indicate its rapid growth. According to a Boston Consulting Group analysis, by 2030, the market capitalization of tokenized assets could reach a staggering $16 trillion.
Should we expect the emergence of other such organizations?
Similar products appeared before BUIDL from BlackRock, and the emergence of new ones can be expected. These include Franklin OnChain U.S., Government Money Fund, Ondo U.S. Dollar Yield (USDY), Ondo Short-Term U.S. Government Treasuries (OUSG), Backed IB01 $ Treasury Bond 0-1yr (bIB01), and others.
Analyzing the Franklin OnChain U.S. Fund
Advantages
The fund invests in U.S. securities (fixed, floating, and variable interest rates) and fully secured repo agreements by U.S. government securities or cash
The fund will only purchase securities that, in their opinion, have minimal credit risk
The fund maintains a dollar-weighted average portfolio duration of 60 days or less
The fund aims to maintain a stable share price of $1
The main goals are capital preservation and liquidity
Main Strategy
The fund invests no less than 99.5% of its total assets in government securities, cash, and repo agreements. The fund uses the amortized cost method to maintain a stable share price of $1.00. Any changes in the 99.5% policy will be notified to shareholders at least 60 days in advance.
The accounting system with blockchain integration will ensure operational efficiency without compromising the quality of transfer agent services.
The fund is available only to U.S. residents, with some exceptions. Shares can only be purchased directly through the app or website, according to the legal restrictions of their state or jurisdiction.
Considering the potential and investments in the tokenization of real-world assets, it can be stated that this sector is just beginning its development. With the involvement of additional resources, tokenization has every chance to develop significantly, opening new opportunities for investors and greatly expanding the horizons for using digital assets in the global economy.