BlackRock's first tokenized money market fund has paid out $100 million in cumulative dividends since its inception, highlighting the growing real-world use of tokenized securities as institutional investors gain adoption.
The milestone for the BlackRock USD Institutional Digital Liquidity Fund (BUIDL) was announced on Monday by Securitize, which serves as the fund's issuer and tokenization partner and oversees on-chain issuance and investor onboarding.
sauce: Securitization
Launched in March 2024, BUIDL was initially published on the Ethereum blockchain. The fund invests in short-term U.S. dollar-denominated assets, including U.S. Treasury bills, repurchase contracts, and cash equivalents, providing institutional investors with a blockchain-based means to earn yield while maintaining liquidity.
Investors purchase BUIDL tokens pegged to the USD and receive dividends directly on-chain that reflect the income earned from the underlying assets.
Since its debut on Ethereum, BUIDL has expanded to six additional blockchains, including Solana, Aptos, Avalanche, and Optimism.
The $100 million milestone is noteworthy because it represents a lifetime payout derived from actual Treasury yields distributed to holders of on-chain fund tokens. This demonstrates that tokenized securities can operate at scale while mirroring the core functionality of traditional financial instruments.
This development also highlights the operational efficiencies enabled by blockchain technology, such as faster settlements, transparent ownership records, and programmable distributions, features that are increasingly attracting interest from large asset managers and institutional investors exploring tokenized real-world assets.
BUIDL, in particular, is rapidly gaining traction, with tokenized funds valued at over $2 billion earlier this year.
At its peak in October, BUIDL held more than $2.8 billion in assets. sauce: RWA.xyz
Related: Fragmentation drains up to $1.3 billion annually from tokenized assets: report
Tokenized money market funds receive attention and scrutiny
Tokenized money market funds have quickly emerged as one of the fastest growing segments of the on-chain RWA market, and for good reason. Their appeal lies in their ability to provide money market-style returns with greater operational efficiency, a dynamic that is beginning to attract attention from traditional financial institutions.
Some market participants see these products as potentially countering the expected growth of stablecoins.
JPMorgan strategist Teresa Ho said in July that tokenized money market funds retain their long-standing appeal as “cash as an asset,” even though regulatory developments such as the approval of the GENIUS Act could accelerate the adoption of stablecoins and undermine the role of cash-like products.
Despite rapid growth, tokenized money market funds are also attracting industry scrutiny. The Bank for International Settlements recently warned that these products can pose operational and liquidity risks, especially as they have become an increasingly important source of collateral within the digital asset ecosystem.
Related: Real-world assets will top DEXs, becoming the 5th largest category in DeFi, according to TVL
