BlackRock Ventures Into Blockchain With Digital Share Class

By: Eva Baxter

BlackRock, the world's largest asset manager, is making strategic strides into integrating blockchain technology within its traditional finance operations. This development is spearheaded by the introduction of a new share class, dubbed DLT Shares, designed to incorporate digital ledger technology. This initiative was recently documented in a filing with the United States Securities and Exchange Commission (SEC), seeking approval to launch blockchain-enabled shares for a robust $150 billion money market fund.

The planned DLT Shares will be tied to BlackRock's BLF Treasury Trust Fund and will be managed by the Bank of New York Mellon (BNY Mellon). The operation involves maintaining a mirrored record of ownership through blockchain technology, although the specific blockchain network intended for this endeavor remains undisclosed. The endeavor extends beyond mere blockchain exploration, as it aims to enhance the traditional financial structure, potentially setting a new precedent for how shares are traded and managed.

Investors in this new share class are expected to commit a minimum of $3 million. BlackRock ensures that its new fund will primarily invest in US Treasury securities, keeping its focus on short-term investments. The underlying assets aim to maintain a dollar-weighted average maturity of no more than 60 days, providing a steady and secure return for the stakeholders. This initiative underscores BlackRock's broader ambition of leveraging blockchain for asset tokenization, thereby increasing accessibility to potentially higher returns by reducing operational and bureaucratic friction.

BlackRock's commitment to blockchain technology follows the remarkable performance of its Bitcoin and Ethereum ETFs, further amplified by its BUIDL fund. CEO Larry Fink envisions that tokenization could democratize access to high-yield investments, a possibility already being explored with the company's successful blockchain-native funds. The potential shift towards tokenization across diverse asset classes could represent a turning point for the finance industry, embedding efficiency and security through the utilization of blockchain networks like Solana, Avalanche, and Ethereum-based layer-2 platforms.