BlackRock Introduces Tokenised Money Market Funds for Stablecoin Reserves

BlackRock, one of the biggest asset management firms in the world, has developed two tokenised money market products that will act as reserves for stablecoins, taking yet another step towards developing regulatory financial products on the blockchain technology platform. The first product is the BlackRock Select Treasury Based Liquidity Fund OnChain Shares (BSTBL), which tokenises an existing Select Treasury Based Liquidity Fund on Ethereum. Secondly, the BlackRock Daily Reinvestment Stablecoin Reserve Vehicle (BRSRV) is a tokenised money market fund, a newly designed fund for institutional investors. 

New Funds Target Institutional Stablecoin Reserve Management

In BSTBL, eligible investors can transfer tokenised fund share holdings among permitted wallets. In contrast, the fund invests its money in cash, short-term US Treasuries, and US Treasury-supported overnight repurchase agreements. BNY acts as the transfer agent and tokenisation agent for the fund's onchain shares. While in BRSRV, the fund is compatible with various blockchains, reinvests all daily dividends automatically, and is intended for digital asset applications such as stablecoin reserves management. Securitize is BRSRV's transfer agent and tokenisation platform. 

As per the release by Business Wire, Jon Steel, Global Head of Product and Platform for BlackRock's Cash Management business, said in a statement, "Cash remains a foundational building block for investors, corporations, and financial institutions [...] As demand grows for high-quality reserve assets to support stablecoins and other tokenised financial products, these funds provide clients with additional choice in how they access and use money market fund investment solutions across traditional and digital markets.”

Each fund seeks to generate current income within the objective of maintaining liquidity and the stability of principal through investments in cash, short-term US Treasury securities, and overnight repurchase agreements secured by US Treasury securities, with an investment strategy that will make the funds “eligible reserve assets” of permissible US payment stablecoin issuers under the Guiding and Establishing National Innovation for US Stablecoins Act (the “GENIUS Act”). 

This will mark another step for BlackRock into the tokenised Treasury sector, where USD Institutional Digital Liquidity Fund (BUIDL) continues to be the biggest fund in the sector with more than $2.6 billion (roughly Rs. 24,796 crore) worth of funds under management, as per the industry data. 

Earlier this year, BlackRock's direct competitors, JPMorgan and Morgan Stanley, also introduced tokenised money market funds on Ethereum and Stablecoin Reserves Portfolio, respectively. JPMorgan now allows stablecoin issuers to hold the reserves backing their stablecoins in a regulated, cash-like vehicle while earning interest. The “OnChain Liquidity-Token Money Market Fund,” with the ticker JLTXX, will invest in US Treasury bills and overnight repurchase agreements secured by US Treasuries or cash.

Similarly, Morgan Stanley now lets stablecoin issuers put their reserves in one of the bank's money market funds and earn interest on them. This offering is part of the Morgan Stanley Institutional Liquidity Funds trust, which has a primary aim to preserve capital, provide daily liquidity, and distribute income while maintaining a $1 (roughly Rs. 95.37) net asset value.