W Power 2024

Circle Introduces Smart Contract Functionality for BlackRock's BUIDL

Circle's USDC enables instant, 24/7 off-ramp for BlackRock's first tokenised fund, BUIDL

Shashank Bhardwaj
Published: Apr 12, 2024 02:54:57 PM IST

Circle Introduces Smart Contract Functionality for BlackRock's BUIDLImage: Shutterstock

BlackRock is currently a major player in the cryptocurrency industry, operating the iShares Bitcoin Trust (IBIT) spot Bitcoin ETF. The IBIT holds 266,580 BTC, net assets under management going over $18 billion. In March 2024, the firm launched the BlackRock USD Institutional Digital Liquidity Fund (BUIDL). This tokenised fund operates on the Ethereum blockchain and offers U.S. dollar yields through tokenisation.

BUIDL enables investors to acquire tokens that symbolise ownership in the fund, which invests in assets such as U.S. Treasury bills. The fund is referred to as a "digital liquidity fund,"  because it is digitised in the form of tokens on the Ethereum blockchain, functioning as an ERC-20 token named BUIDL.

On April 11, Circle, a leading digital financial technology company and issuer of the USDC stablecoin, announced a new smart contract functionality that enables investors in BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) to transfer their shares to USDC.

Circle's smart contract functionality facilitates the seamless transfer of BUIDL shares to Circle in exchange for USDC on the secondary market. This allows BULDL investors a near-instant, 24/7 off-ramp that leverages the core benefits of tokenised assets, including speed, transparency, and efficiency.

“Tokenisation of real-world assets is a rapidly emerging product category,” said Jeremy Allaire, Co-founder and CEO of Circle.

Allaire also stated, "Tokenizing assets is one important dimension of solving investor pain points. USDC enables investors to move out of tokenised assets at speed, lowering costs and removing friction. We're thrilled to provide this functionality to BUIDL investors and deliver the core benefits of blockchain transactions via USDC availability to investors.”

Circle’s USDC is the world’s second-largest stablecoin by market capitalisation. As of today, USDC's market cap is $32.27 billion, seeing a 0.02% increase in the past seven days.

Additionally, BlackRock and Circle have a history of collaboration in the crypto industry, dating back to 2022 when Circle initiated investments in the Circle Reserve Fund to oversee a segment of the USDC reserves in corporation with BlackRock. The Circle Reserve Fund, managed by BlackRock Advisors, is a registered Rule 2a-7 government money market fund, reflecting their actions in managing stablecoin reserves.

Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash

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