BlackRock, one of the world’s leading asset managers, has reached a new high with its BUIDL product, which is now the largest tokenized cash fund on a blockchain.
Rapid success
BUIDL, launched six weeks ago, has already reached a capitalized market of $375 million, surpassing Franklin Templeton’s BENJI product, which has a capitalized market of $368 million. This rapid growth is attributed to the contribution of $70 million in one week, including $50 million from asset tokenization firm Ondo Finance.
A growing market
The market for tokenized assets on blockchain is growing rapidly, with over $1.2 billion in US treasuries tokenized on Ethereum, Polygon, Solana and other blockchains. According to BlackRock CEO Larry Fink, financial markets could be made more efficient by moving ontochain.
A challenge for investors
However, there is currently little investor demand for these tokenized products, due to low liquidity. Tom Wan, a research strategist for 21.co, described this phenomenon as a “chicken-and-egg problem”, where issuers are struggling to see a clear benefit in tokenizing overchain assets with low demand.
An opportunity for investors
However, demand for US treasuries already exists in the stablecoin market, which is worth $140 billion. According to Wan, this means that investors could be more easily persuaded to switch to tokenized products when demand increases.
A promising future
According to estimates by Boston Consulting Group, tokenization on blockchain could account for 10% of overchain tokenized assets in the future. Currently, government treasury securities account for 1.4% of overchain tokenized assets, up from 0.1% at the start of 2023.
