Prominent tokenization real-world asset firm Securitize has secured $47 million in a funding round led by BlackRock, the world’s leading asset management firm, according to a recent press release. The round also witnessed the participation of other major investors, including Hamilton Lane, ParaFi Capital, Tradeweb Markets, Aptos Labs, Circle, and Paxos.
The latest funding comes after BlackRock’s debut of its first tokenized fund BUIDL, which has recently become the largest tokenized equity fund.
The fresh capital aims to support Securitize’s growth and expansion plans, particularly its entry into the European market through the EU’s DLT Pilot Regime. As part of the strategy, Joseph Chalom, BlackRock’s Global Head of Strategic Ecosystem Partnerships, will also join Securitize’s Board of Directors.
“At BlackRock, we believe that tokenization has the potential to drive a significant transformation in capital markets infrastructure. Our investment in Securitize is another step in the evolution of our digital assets strategy,” said Chalom. “We are pleased to lead this investment round alongside other participants and help foster innovation that will help meet the future needs of our clients.”
Tokenization is The Future
Securitize is a platform that makes traditional investments easier to buy and sell by using digital tokens. The company’s mission is to change the whole financial system by making things faster, cheaper, and more transparent.
The new funding round also marks extended strategic collaboration between Securitize and BlackRock. Securitize currently acts as a transfer agent and tokenization platform, managing the tokenized shares and reporting on subscriptions of BlackRock’s recently launched tokenized fund, BlackRock USD Institutional Digital Liquidity (BUIDL).
Additionally, Circle’s participation in the funding round is noteworthy. Last month, the company introduced new smart contract functionality that enables investors to transfer BUIDL shares to USDC on the secondary market.
Commenting on the round funding, Carlos Domingo, the co-founder and CEO of Securitize, believes that using tokenization with blockchain technology can improve how financial markets work. He sees this as a big positive development for the entire financial industry.
Juan Delgado, Hamilton Lane Co-CEO, expressed his support for Securitize’s approach and a strong belief in the potential of tokenization to improve access to private markets.
The Big Money Loves Blockchain
Hamilton Lane is one of the world’s largest private markets investment firms, with multiple offices throughout North America, Europe, Asia Pacific and the Middle East. As of December 31, 2023,the company managed approximately $903 billion in assets, including $120 billion in discretionary assets and nearly $783 billion in non-discretionary assets.
Securitize’s latest funding round comes less than two months after BlackRock launched BUIDL. BUIDL provides qualified investors with the opportunity to earn U.S. dollar yields by subscribing to the fund through Securitize Markets.
Earlier this week, BUIDL has become the largest tokenized fund, overtaking previous leader Franklin Templeton’s similar offering FOBXX within just six weeks of its launch. As of April 28, FOBXX still led the pack with $376 million in AUM.
According to data from Dune Analytics, BUIDL, represented by the BUIDL token on the Ethereum network, now has $375 million in assets under management. This captures almost 30% of the $1.3 billion tokenized Treasury market.
BlackRock’s recent foray into tokenization has sparked a surge of activity in the field. Last week, Franklin Templeton stepped up with a new announcement that investors can directly transfer shares of their FOBXX fund on a public blockchain.
According to 21Shares analyst Tom Wan, tokenized government securities are set for major growth. He predicts their market share could skyrocket from its current 1% to over 10%.
However, Wan acknowledges there’s currently a limited appetite for tokenized traditional assets, even among crypto-savvy investors.
Despite these challenges, Wan remains optimistic about the future of tokenizing assets like US Treasuries. The analyst believes in the already strong demand for such assets within the cryptocurrency space, suggesting a built-in customer base for tokenized government bonds.
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