How BlackRock’s BUIDL Fund Leads the Tokenization Revolution

Why does this matter? BUIDL marks BlackRock’s decisive step toward leading institutional blockchain finance, setting new standards for speed, efficiency, and yield in conservative investment instruments.

With almost-instant settlement, immutable transaction records, and significant on-chain liquidity, BUIDL is reshaping investor expectations and driving further institutional adoption of digital assets.This article explores why BlackRock’s BUIDL Fund has grown so rapidly, how its success sets a new industry benchmark, and what its future might mean for tokenized finance and institutional investors worldwide.

Key Drivers Behind the BUIDL Fund’s Rapid Growth

Multiple factors drive the rapid growth:

• Institutional Credibility: BlackRock’s reputation helped alleviate concerns about digital asset volatility.
• Clear Value Proposition: BUIDL offers near-instant settlement, composability, and growing liquidity pools to this low-risk, short-term liquid asset class. The underlying short-term U.S. Treasuries and other conservative instruments BUIDL invests in cater to investors looking for stable yield. Thus far, BUIDL’s annual percentage yield (APY) has been 4.5 %.
• Robust Partnerships: Collaborations with Securitize, Anchorage Digital Bank, BitGo, Coinbase, and Fireblocks ensured institutional-grade compliance, custody, and transfer-agent functionalities in the initial ecosystem. Further partnerships with JPMorgan’s Onyx Network aim to incorporate BUIDL for repo transactions.

What Is the BUIDL Fund and How Does It Work?

BUIDL is a tokenized money market fund that invests in short-term, high-quality securities to provide liquidity while preserving capital. It caters to high-net-worth individuals and institutional investors, with investment minimums of $5M and $25M.Qualified investors get digital tokens that represent a fractional share of the underlying money market portfolio. BUIDL combines strong on-chain capabilities with regulated fund standards.

Core Concept of Tokenized MMFs: BUIDL Fund

Each BUIDL token gives rights to a share of a conservative asset portfolio that consists of 'cash-like' assets, mostly U.S. Treasury bills and repurchase agreements. This structure brings:

• 24/7 Transferability: Investors can redeem their BUIDL tokens multiple times daily. This way investors are not limited to traditional redemption windows. Investors can also smoothly exchange BUIDL tokens for USDC stablecoins anytime.
• Stable Valuation: Price stability backed by short-term Treasuries, protecting BUIDL token price from the volatility of crypto-native assets. 
• Interest gains: Paid Monday to Friday, directly to investors’ wallets.
• Multi-chain liquidity: BUIDL tokens are issued natively on Ethereum, Arbitrum, Optimism, Polygon, Avalanche, and Aptos for broader investor choice.

For example, a large financial institution looking for instant liquidity could allocate funds into BUIDL tokens, benefiting from yield generation, regulatory compliance, and smooth on-chain redemptions on their preferred blockchain.

BUIDL’s Multi-Chain Approach and Its Benefits

One of BUIDL’s key features is the fund’s multi-chain approach. While BUIDL tokens were initially launched only on Ethereum, it expanded natively to five other blockchains: Arbitrum, Optimism, Polygon, Avalanche, and Aptos in November 2024.

Operating in multiple blockchains means that BUIDL investors can use their preferred blockchain ecosystem without relying on cross-chain transfers or bridges. Distributing transactions across many blockchains also reduces bottlenecks, settlement times and transaction fees, enhancing liquidity distribution and investor choice. Each blockchain ecosystem has unique features that can foster future innovation. 

Already, the management fees of BUIDL vary between the blockchains:

• 50 basis points on Ethereum, Arbitrum, and Optimism.
• 20 basis points on Polygon, Avalanche, and Aptos, subsidized by these blockchain foundations. 

Interestingly, BUIDL’s management fees are not lower than those in traditional institutional MMFs that often range between 10 and 50 basis points, depending on the specific fund and share class. On the other hand, BUIDL’s near-instant settlements and composability for institutions may outweigh fee considerations.

Regulatory Framework and Investor Eligibility

The BUIDL Fund operates within a clear and strict regulatory framework, complying with existing securities laws and using U.S. Securities and Exchange Commission (SEC) exemptions such as Rule 506(c) private placement for accredited investors and the 3(c)(7) exemption for qualified purchasers. This means that buying and holding BUIDL tokens is strictly limited to verified and accredited U.S. investors. 

Securitize, a blockchain infrastructure provider, takes care of BUIDL’s investor eligibility. Every investor goes through comprehensive Know Your Customer (KYC) and Anti-Money Laundering (AML) reviews and token transfers are limited between approved addresses. BUIDL aims to offer a stable $1 per token by moderating the token supply with underlying assets daily.

Exploring BUIDL’s Real-World Impact

Institutional Adoption – Case Studies and Metrics

BUIDL’s rapid growth from zero to $1.2B in AUM illustrates how investors trust the sponsor and see clear benefits in an on-chain MMF. 

One example is Ondo Finance, which has invested heavily in BUIDL through its USD Yield Fund (OUSG). With a lower minimum investment  (dropping from BUIDL’s 5 million to OUSG’s $100,000) and temporary zero-fee structure, OUSG has helped expand BUIDL’s reach beyond traditional institutions into fintech and crypto-native markets. OUSG accounted for nearly $200 million of BUIDL’s assets by the end of 2024.

In early 2025, Ethena Labs allocated $200 million of BUIDL to back its synthetic stablecoin USDtb. This made BUIDL the primary reserve asset in one of the fastest-growing crypto-native dollar stablecoins.

Bringing BUIDL to DeFi

In March 2025, BUIDL took a significant step into DeFi. Securitize named RedStone as its official oracle partner for BUIDL and other tokenized funds, enabling secure, real-time price feeds. This integration allows BUIDL to be used as collateral in lending protocols and power lending pools and enter on-chain money markets. 

RedStone provides trusted pricing and yield data (e.g., net asset values, annual percentage yields) that lets DeFi protocols interact with BUIDL safely and efficiently. With this infrastructure, BUIDL is expanding from a passive settlement asset into a programmable, yield-bearing token with growing composability across public blockchains.

 Lessons Learned from BUIDL’s AUM Expansion

The BUIDL Fund’s quick growth confirms that:

1. Brand Reputation Matters: A global institutional player, BlackRock, can tackle reputational risks and reduce institutional reluctance to enter blockchain markets.
2. Compliance Infrastructure Is Fundamental: Robust KYC/AML frameworks and institutional custody solutions support institutional trust.
3. Scalability Succeeds in Multi-Chain: Distribution across multiple blockchains reduces congestion and gives investors more freedom of choice.

Partnerships Provide Value: Partnerships with companies like Securitize and Circle ensured stable infrastructure, smooth investor onboarding, and optimal liquidity solutions.

Future Outlook – What’s Next for BUIDL and Tokenized Assets?

BUIDL is the first step in BlackRock’s long-term tokenization roadmap, which targets institutional adoption. BUIDL has successfully brought traditional finance institutions into the tokenized finance ecosystem with their regulated and low-risk BUIDL. This approach helps build institutional trust and familiarity with tokenized finance, lowering their threshold to turn to more on-chain asset classes in the future.

BUIDL’s strong performance suggests growth and expansion also in the future. For example, BlackRock could collaborate with international regulators to offer a compliant BUIDL access to non-U.S. investors. This move would increase BUIDL’s global outreach. 

BUIDL tokens may eventually be integrated into institutional repo transactions, with early discussions involving JPMorgan’s Onyx Network highlighting this potential use case. 

The BUIDL is building a future where traditional finance and decentralized finance are increasingly blending together.

Conclusion

The rapid rise of BlackRock’s BUIDL Fund demonstrates how tokenization is reshaping institutional finance by merging blockchain’s efficiency with traditional money market stability. As institutions increasingly welcome tokenized MMFs for liquidity and yield, products like BUIDL may set the standard for the future of digital finance.