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BlackRock "BUIDL" Fund Comprehensive Explanation | Mechanism and Benefits of Surpassing 2.9 Billion Dollar
BUIDL is a digital asset backed by U.S. Treasury bonds, capturing about 40% of the tokenization U.S. Treasury bond market. In this article, we will explain in detail why BUIDL has experienced such rapid growth, from its mechanism to its future prospects.
Table of Contents
Overview and Latest Achievements of the BUIDL Fund
BUIDL (officially named: BlackRock USD Institutional Digital Liquidity Fund) is BlackRock's first tokenized fund launched in March 2024. As a digital fund for institutional investors, it aims to generate yield through management in US Dollar.
Latest data of BUIDL fund
| Item | Data | Details | | --- | --- | --- | | Assets Under Management (AUM) | 2.9224 Billion Dollar | As of April 2025, approximately 29 times growth in one year | | Token Supply | 2,922,443,478 BUIDL | 1BUIDL = 1USD pegged | | Number of Holders | 51 | Limited Investor Base Focused on Institutional Investors | | Market Share | Approximately 40% | Overwhelming share in the tokenization U.S. Treasury market | | Minimum Investment Amount | 5 million Dollar | Participation only for qualified investors |
*Source: DUNE### Blockchain Deployment Status
The BUIDL Token is deployed across multiple blockchains, with approximately 93% of its supply operating on Ethereum. Additionally, it is supplied on Avalanche, Aptos, and Ethereum L2 (Polygon, Arbitrum, Optimism), enhancing convenience for investors.
| Blockchain | Supply Ratio | Features | | --- | --- | --- | | Ethereum | Approximately 93% | Main chain, maximum liquidity | | Polygon | About 3% | Low fees, fast transactions | | Arbitrum | Approximately 2% | Ethereum L2, scalability improvement | | Others (Avalanche, Aptos, Optimism) | About 2% | Meeting diverse investor needs |
More about tokenization funds
Overview of BlackRock and its Digital Asset Strategy
BlackRock was founded in the United States in 1988 and offers a variety of financial products, including investment trusts, ETFs, and asset management services for institutional investors. The total assets under management (AUM) exceed approximately 9 trillion Dollars, making it the largest asset management company in the world. In recent years, it has made its presence felt in the digital asset space, starting with its entry into Bitcoin ETFs.
BlackRock's core services
| Service/Function | Content | Features | | --- | --- | --- | | iShares (ETF) | Provides ETFs for various asset classes such as stocks and bonds | Attractive due to diverse number of securities and low-cost management | | Aladdin Platform | Implement investment risk management and portfolio analysis | Advanced operational support through real-time analysis | | Institutional Investor Management | Management of large funds such as corporate pensions and government-related funds | Focus on long-term perspective and stable results | | Digital Assets | Bitcoin ETFs, Tokenized Funds | Full-scale rollout from 2024, leading the industry |
BlackRock's approach to digital assets
BlackRock positions 2024 as the "Year of Digital Assets" and is actively investing in the following areas:
Mechanism and Investment Process of the BUIDL Fund
This explains the structure of the BUIDL fund and the relationship with partner companies. The core of the fund involves the following companies and services:
4 Steps from Investment to Profit Distribution
Investors will contribute to the fund by purchasing BUIDL tokens through the Securitize Markets platform. At the time of purchase, they can use regular Dollar remittances or the stablecoin "USDC" provided by Circle.
Step 2: Management by BlackRock
The funds raised through Securitize will be managed by BlackRock. The investments will consist of short-term assets such as U.S. Treasury bonds, cash, and repurchase agreements, aiming for high liquidity and stable returns.
Step 3: Profit Distribution
The profits earned by the fund through management will be distributed to investors as newly issued BUIDL Tokens. Specifically, the profits generated from BlackRock (Dollar) will be sent to Securitize, and an equivalent amount will be allocated as new BUIDL Tokens to each investor's wallet.
Step 4: Holding and Cashing Tokens
Investors can again exchange their held BUIDL tokens for US Dollars or USDC through Securitize Markets. During the exchange, requirements such as KYC/AML will also apply, and investors must meet conditions such as eligibility and minimum investment amounts.
🔗 Let's learn the basics of DeFi investment
Investing in tokenized assets like BUIDL requires knowledge of DeFi.
Investor Participation Requirements
| Condition Item | Requirement | Details | | --- | --- | --- | | Investor Qualification | Accredited Investor | Qualification Requirements Based on SEC Standards | | Minimum Investment Amount | 5 million Dollar | High setting for institutional investors | | KYC/AML | Required | Identity verification by Securitize Markets | | Trading Currency | Dollar or USDC | 24/7 USDC exchange feature available |
If you want to start investing in cryptocurrency
The first step in investing in tokenized assets is to open an account at a reliable exchange.
[SBI Group's Sense of Security] Opening an SBI VC Trade Account [Monex Group Operated] Coincheck Account Opening
Both are safe exchanges registered with the Financial Services Agency.
Partner Companies and Strategic Partners
The operation of BUIDL involves not only BlackRock but also various companies. Below, we have summarized the main partner companies along with their roles and characteristics.
| Company Name | Main Role | Features & Achievements | | --- | --- | --- | | Securitize | Tokenization Platform Transfer Agent Intermediary Agent | • Pioneer company in the issuance and management of digital securities • Registered with the SEC and has a high level of regulatory compliance. • Over 550,000 accounts held as of March 2025 • The total investment amount exceeds 2 billion Dollars | | Circle | Provides exchange functionality with USDC | • Issuer of the stablecoin "USDC" • BUIDL Token and USDC can be exchanged 24 hours a day, 365 days a year. • Support for continued asset holding in digital Dollar | | PwC | Auditor | • One of the Big Four accounting firms • Served as an auditor since the initial BUIDL issuance. • Providing assurance, tax, and consulting services | | BNY Mellon | Custodian | • A major financial institution with over 200 years of history • Custody and management of BUIDL securities and assets • A wealth of experience in custody services for institutional investors |
synergy of partnerships
Through these strategic partnerships, BUIDL is achieving the following advantages:
Trends of Tokenization in Financial Markets
Tokenization refers to the technology that records assets as digital tokens on the blockchain, facilitating transactions and the transfer of ownership. In particular, in the tokenization of securities, it allows for the tracking of fund ownership on the blockchain, enabling efficient management and transactions.
The benefits of such tokenization include the following points.
Robert Michnick, the head of BlackRock's digital asset division, emphasized during the product announcement that "tokenization plays a part in developing solutions to meet true customer needs."
Other major asset management firms are following suit.
In recent years, many financial institutions and companies other than BlackRock have been working on tokenization, and "asset tokenization (RWA: Real World Assets)" has become a major trend.
Some main examples are as follows.
Regulation and Compliance
The cryptocurrency analysis company IntotheBlock lists considerations and risks that institutional investors should take into account regarding on-chain RWAs, including BUIDL ("The Role of RWAs in DeFi: Institutional Adoption & Risk Considerations").
One is regulatory compliance and legal structure.
The regulation of on-chain assets remains unclear in many aspects, and the treatment of tokenized assets varies by jurisdiction. It is anticipated that institutional investors will seek clarification of regulations to avoid risks.
Another one is transparency and its reporting.
For institutions, the proof of backing assets for tokens is a major point of interest. To avoid default risk, it is necessary to utilize protocols for information disclosure, such as the report from Sky (formerly known as MakerDAO) and rwa.xyz.
Another issue is the yield problem.
You should confirm that you can achieve a yield equal to or greater than that of traditional assets after deducting fees and other charges.
Future Outlook and Impact on the Industry
The BUIDL continues to expand its market size. What predictions do experts have for its future?
Expert predictions on tokenization
Multiple institutions have indicated that the demand for tokenization will increase after 2025.
Securitize, a partner of BlackRock, suggests in "One to Watch: How Tokenization Will Evolve in 2025" that its momentum could increase exponentially.
In addition to the RWA that has been tokenized so far, there are indications that new subjects for tokenization, such as energy and time, are emerging.
BCG mentions the tokenization of funds. It highlights it as "the third revolution in the asset management industry," showing the potential to bring billions of Dollars in benefits to both Financial Institutions and investors ("Tokenized Funds The Third Revolution in Asset Management Decoded").
Specifically, it is viewed that the AUM of tokenization funds has the potential to reach 600 billion Dollar by 2030. This means that in just 7 years, it will reach 1% of the total AUM of investment trusts and ETFs worldwide.
Key to Expanding Demand
BCG cites the proliferation of stablecoins and the entry of traditional institutions as factors further driving the demand for tokenization funds.
Stablecoins, led by USDT and USDC, have shown a tendency to expand their market size around the end of 2023. As the number of users holding currency on-chain increases, the demand for investment products that can be completed entirely on-chain is expected to rise.
Additionally, it is said that global asset management companies like Franklin Templeton and BlackRock venturing into the utilization of blockchain is also supporting the overall market.
Risks and Challenges
Positioning of Dollar and US Bonds
Larry Fink, the CEO of BlackRock, has sounded the alarm that the position of the US Dollar, which has been treated as a global reserve currency, may not last forever ("Larry Fink’s 2025 Annual Chairman’s Letter to Investors The democratization of investing Expanding").
The report mentions that the outstanding balance of US Treasury bonds continues to grow every year, raising concerns that this year's interest payments may exceed defense spending and highlighting the risk of a permanent deficit by 2030.
In January of this year, there were also reports indicating the possibility of U.S. Treasury bonds being downgraded from AAA.
Until now, the US Dollar and US Treasury bonds have been popular investment targets due to their high interest rates and reliability, and this has also been a factor in the rapid expansion of BUIDL.
If this premise is overturned, it could pose headwinds to the growth of BUIDL.
Clarification of Regulations
Clarification of regulations is one of the major barriers to the widespread adoption of tokenization funds.
There are many considerations to think about, such as whether to treat the token as a security and which country's laws to apply in the case of transactions across multiple countries.
The BCG report also points out that solving such challenges is essential to fully realize the potential of tokenization funds.
On the other hand, there are reports expressing expectations for trends in 2025, as the number of countries actively advancing regulatory arrangements, such as the EU and Singapore, is increasing.
Summary
This article introduces BlackRock's tokenization fund, BUIDL.
The issuer is the global asset management company BlackRock, and the main investment targets are US Dollar and US Treasuries. Its reliability is the attractive feature of the product.
The adoption of tokenization is expected to enhance liquidity and asset efficiency compared to traditional funds.
BUIDL can only be purchased by qualified investors. However, the idea of tokenizing funds may become more widespread in the future.
Let's understand the mechanism of tokenization funds and pay attention to the future market trends.
More about tokenization funds
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