Circle joins the tokenization movement
Yesterday, Thursday April 11, 2024, Circle, the company issuing the USDC stablecoin, announced that it was launching a new smart contract allowing exchanges between BUIDL, the fund tokenized by BlackRock, and its dollar-backed token .
As a reminder, in March 2024, BlackRock launched “BUIDL”, its first tokenized fund on the Ethereum blockchain , in partnership with Securitize, a platform recognized by the SEC. BUIDL is a tokenization of US Treasury bonds and repurchase agreements, it delivers monthly returns directly to investors’ portfolios in the form of tokens.
On this occasion, Jeremy Allaire, co-founder and CEO of Circle, declared:
“Asset tokenization is just one important dimension to solving investors’ problems. USDC allows investors to exit tokenized assets quickly, reducing costs and eliminating friction. We are excited to provide this functionality to BUIDL investors and deliver the core benefits of blockchain transactions through the availability of USDC to investors. »
This new feature offers BUIDL token holders the ability to sell their funds and receive USDC almost instantly at any time , even when BlackRock services are closed.
USDC is the 2nd stablecoin in terms of market capitalization, with more than $31 billion , just behind Tether’s USDT and its $107 billion.
By allowing BUIDL holders to use USDC, Circle seeks to increase the use of its stablecoin against USDT . After reaching up to 35% of the stablecoin market in July 2022, USDC’s share only represents 20% today.
Usage of USDC was increasing significantly until Circle’s funds were affected by the bankruptcy of Silicon Valley Bank in March 2024 , reducing its dominance by 5 points in a matter of days.
BlackRock consolidates its position in the cryptocurrency sector
The launch of BUIDL illustrates BlackRock’s strong commitment to the cryptocurrency ecosystem. 3 months after the approval of spot Bitcoin ETFs, IBIT, BlackRock’s ETF, is the big winner in the market, now managing more than 265,000 BTC , or nearly $19 billion.
Currently, BlackRock and 8 other asset managers are awaiting approval of their spot Ethereum ETFs. Investors hope to see these ETFs also approved, anticipating a rise in its value .
Since the approval of spot Bitcoin ETFs, the price of Bitcoin has increased by over 60%, from $45,500 to over $73,000 in just 2 months .
BlackRock’s significant involvement in the Ethereum ecosystem, through the application for ETFs and the launch of their tokenized fund, could motivate other competing players . In the near future, we could see many traditional institutions coming to Ethereum and using its applications.
This could thus boost the capitalization of cryptocurrencies and increase the total values locked (TVL) in decentralized finance (DeFi) protocols on distributed networks.
Source : Businesswire
