Crypto News- In a groundbreaking development, BlackRock’s USD Institutional Digital Liquidity Fund, known as BUIDL, has risen to the top as the largest tokenized treasury fund on a blockchain, surpassing Franklin Templeton’s offering this week.
With just six weeks under its belt, BUIDL has swiftly captured the market’s attention, boasting a remarkable $375 million market cap. This surge comes on the heels of a significant influx of $70 million in the past week alone, with $50 million pouring in from Ondo Finance’s OUSG token.
BlackRock’s BUIDL: Transforming Finance with the World’s Largest Tokenized Treasury Fund
In contrast, Franklin Templeton’s BENJI, which has been in existence for 12 months, finds itself trailing behind at $368 million. Notably, BENJI’s assets under management (AUM) have experienced a decline of 3.7% over the same period.
The rise of tokenized assets, including U.S. Treasurys, reflects a growing trend towards blockchain-based financial solutions. BlackRock’s CEO, Larry Fink, recently emphasized the potential for capital markets to enhance efficiency through blockchain integration.
Unlocking Potential: Challenges in Tokenization Amidst Subdued Investor Demand
While tokenization presents numerous opportunities across various asset classes, including stocks and real estate, current investor demand remains subdued. Thin liquidity poses a challenge, according to research strategist Tom Wan, contributing to a ‘chicken and egg problem’ for issuers contemplating asset tokenization.
However, optimism persists, fueled by existing demand for tokenized U.S. Treasurys from players within the stablecoin market, valued at $140 billion. As demand accelerates, facilitated by industry players’ familiarity with tokenized assets, the transition to blockchain-based solutions is expected to gain momentum.
Despite representing a mere 1.4% of total on-chain assets, tokenized government securities are poised for significant growth, projected to reach 10% market dominance in the future. Boston Consulting Group forecasts the blockchain-based tokenization market to reach an impressive $16 trillion by 2030, underscoring the transformative potential of this technology.
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