With over $10 trillion under its management, asset management firm BlackRock has led a $47 million investment in Securitize, a prominent player in the tokenization space. 

As announced on Wednesday, notable participants in the funding round include investment firm Hamilton Lane, financial technology company Tradeweb Markets, and asset manager ParaFi Capital. 

As part of the investment, Joseph Chalom, BlackRock’s global head of strategic ecosystem partnerships, will join Securitize’s board of directors.

BUIDL is the BlackRock USD Institutional Digital Liquidity Fund, a tokenized fund created by BlackRock that operates on the Ethereum blockchain to offer US dollar yields through tokenization. 

BlackRock firmly believes that tokenization holds the potential to revolutionize capital markets infrastructure, as stated by Joseph Chalom. 

According to the announcement, BlackRock’s investment in Securitize represents another step forward in its digital assets strategy, demonstrating its confidence in the growth and potential of the tokenization sector.  

With its compliance approach, Securitize has earned the trust and business of major financial firms, including BlackRock, Hamilton Lane, and KKR. 

The company has collaborated with BlackRock’s BUIDL fund, which now boasts $375 million of investments, to issue tokenized private credit funds. Securitize has also launched an alternative trading system (ATS) that enables regulated trading of various securities.

With the fresh investment, Securitize aims to expand the scope of its existing licenses and explore the possibility of launching tokens on new blockchains, such as Aptos (ATP). 

While holding a broker-dealer license with the Financial Industry Regulatory Authority (FINRA), Securitize is considering obtaining a special purpose broker-dealer license from the Securities and Exchange Commission (SEC). 

However, rather than offering custody services, Securitize intends to work with established providers like Anchorage and BitGo.

In an interview with Fortune Magazine, Securitize CEO Carlos Domingo envisions two primary use cases for tokenized assets. The first involves bringing traditional finance (Web2) products, such as money market funds, to Web3 investors. 

The second entails introducing Web3 products to traditional finance (Web2) investors. Tokenizing private credit funds, which offer higher yields than money market funds, exemplifies this potential, as it reduces costs and opens up fractional ownership to a broader range of investors.

Domingo emphasizes that tokenization enables efficient fractional ownership and democratizes access to previously restricted investments due to high minimum requirements. Securitize CEO concluded:

Tokenization, by allowing this very efficient fractional ownership, and with all this multitude of investors and securities in an efficient way, opens up democratization. 

As a result of Bitcoin’s (BTC) 20% correction from its all-time high (ATH) of $73,700 reached in mid-March, the largest cryptocurrency on the market is now trading at $57,00. 

Featured image from Shutterstock, chart from TradingView.com

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