BlackRock Files for Digital Shares in $150M Money Market Fund

BlackRock, the world's largest asset manager, has filed with the U.S. Securities and Exchange Commission (SEC) to issue digital shares for its money market fund, the BlackRock Liquidity Funds Treasury Trust Fund (TTTXX). The digital shares, which will be backed by the fund's investments in U.S. Treasury bills and cash, totaling over $150 million, will use blockchain technology to provide an additional layer of transparency regarding share ownership. The Bank of New York Mellon (BNY Mellon) will maintain a "mirror record" of share ownership using blockchain, which will serve as an updated ledger for verification purposes but will not function as the primary, legally binding ownership record.

The digital shares will not be tokenized but will mirror ownership records, serving as a tool for transparency. Institutional investors will be required to commit to a minimum purchase of $3 million in digital shares, with trades only being executed through BNY Mellon. This exclusivity underscores the product's strategic, large-scale focus, targeting institutional investors rather than retail ones.

The filing does not provide details on a ticker or management fee for the digital shares. However, it highlights the potential for blockchain to further integrate into mainstream finance. This move aligns with similar efforts by other large finance industry players, such as Fidelity, which recently filed for an Ethereum-based share class that could represent their own U.S. Treasury fund.

BlackRock's filing is part of a broader trend in finance, where experimentation with blockchain technology is being used to create tokenized versions of traditional financial instruments, such as treasury bills. The treasury tokenization market is already valued at over $6 billion, with BlackRock's BUIDL boasting more than $2.55 billion in assets. The regulatory setting for these filings is still uncertain, but if approved, it could indicate that blockchain is being increasingly embraced by traditional financial markets.

BlackRock's shift towards digital shares is also a product of the company's strategic position in a shifting market. With more than $8 trillion in assets under management, BlackRock has the influence and capacity to drive changes in how financial products are designed and sold. If successful, these digital shares could replace much of the opacity and overhead in the asset management world, providing a more transparent and efficient way for institutional investors to manage their assets.