BlackRock (BLK) Set to Digitize Shares of Its $150 Billion Treasury Trust Fund, According to SEC Filing

BlackRock is set to integrate blockchain technology into the administrative functions of its significant Treasury Trust money market fund, which boasts assets worth $150 billion, by filing to introduce a digital share class via BNY Mellon.

The newly proposed “DLT Shares,” which stands for distributed ledger technology, will not encompass cryptocurrencies. BNY Mellon, tasked with exclusively distributing the fund, plans to leverage blockchain to replicate ownership records, marking a gradual advancement that may lead to more extensive usage of tokenized cash, digital assets, or blockchain-supported settlement systems within the realm of conventional finance.

In recent years, numerous firms have experimented with blockchain implementations for real-world assets, facilitating the swift transition of traditional finance into the realms of cryptocurrencies and decentralized finance. Earlier on Wednesday, Libre announced its plans to tokenize $500 million of messaging platform Telegram’s $2.4 billion debt, transferring it to the TON blockchain.

As of April 29, BlackRock’s Liquidity Treasury Trust Fund is part of the firm’s Liquidity Funds division and holds over $150 billion in assets. The DLT share class requires a minimum investment of $3 million for institutional investors, with no stipulations on further acquisitions. It’s important to note that this SEC filing is in a preliminary phase and awaits regulatory approval.

This isn’t BlackRock’s inaugural venture into tokenization. Its BUIDL fund, designed for blockchain environments in collaboration with Securitize, currently manages assets exceeding $1.7 billion and has extended its reach to the Solana blockchain.

Larry Fink, the CEO, has consistently expressed his conviction regarding the long-term potential of tokenization and decentralized finance. In his annual letter to shareholders, he raised concerns that the U.S. may risk forfeiting its financial supremacy unless it effectively manages its debt, a situation that could heighten interest in alternatives like Bitcoin.

“If the U.S. doesn’t get its debt under control … America risks losing its status as the reserve currency to digital alternatives like Bitcoin,” Fink commented. He believes that decentralized finance represents a remarkable innovation, enhancing market efficiency, reducing costs, and increasing transparency. Yet, he also cautioned that this innovation could diminish America’s economic edge.