Last week, BlackRock modified one of its money market funds to optimize it for attracting stablecoin issuers. What are the key takeaways?
BlackRock sets out to conquer stablecoins
Last week, BlackRock officially revamped one of its money market funds to give it the features needed to attract stablecoin issuers.
In August, the global leader in asset management filed a notice with the Securities and Exchange Commission (SEC) informing it of the name change of its “BlackRock Liquidity Funds” to “BlackRock Select Treasury Based Liquidity Fund.” At the same time, BlackRock also unveiled a change to the fund’s structure, bringing it into line with the standard generally adopted by issuers of collateralized stablecoins.
In summary, the fund now invests at least 80% of its cash in Treasury bills with a maturity of 93 days or less, with an average maturity of 60 days.
For Jon Steel, BlackRock’s global head of cash management products and platforms, this fund is part of the company’s commitment to being “a leading reserve manager”:
It represents an opportunity not only to help our clients who want to issue a stablecoin and understand how we can help them do that, but also to create new distribution opportunities.
While BlackRock is already Circle’s main partner, with a mandate exceeding $64 billion, it will be interesting to see how the BlackRock Select Treasury Based Liquidity Fund will position itself in the future, in a constantly growing market that is currently worth $314 billion.
At the time of writing, this fund is worth nearly $6.44 billion.
All of this is reminiscent of BlackRock and Securitize’s tokenized BUIDL fund, which is currently capitalized at $2.84 billion. And for good reason, as BUIDL is already being used by Ethena to issue the USDtb stablecoin, which itself will play a major role in collateralizing the USDm of the MegaETH layer 2.
