BlackRock Uses Blockchain to Bring Transparency to TradFi

TLDR

• BlackRock is using blockchain to track one of its funds.
• They recently filed for approval with the SEC.
• Fidelity filed to track one of their funds last month.

BlackRock, the world’s largest asset manager, is no stranger to outside-the-box thinking. They were one of the big names to go live with a BTC ETF when they were approved. It was only a year and a half ago, but time flies in crypto, doesn’t it?

Then, they recommended a 2% allocation of BTC in investor portfolios. We said, “Ok, BlackRock. Ok.” And then we nodded. Our editor doesn’t appreciate GIFs like we do, but you can use your imagination to mentally place the famous Zach Galifianakis nodding GIF under this paragraph.

To us, that was a massive step in the right direction. But now it would appear that BlackRock is on the actual crypto train and going full-steam ahead. They’re using blockchain, not just buying up digital assets. Let’s get after it.

Blockchain Meets Mainstream Finance

BlackRock is utilizing blockchain to enhance old-school financial systems. We think that’s awesome. Because that’s why it was invented! You won’t see NFTs or Bitcoin flying out of this one because blockchain, inherently, has nothing to do with finance.

BlackRock has recently filed with the SEC to create digital ledger technology (DLT) shares for one of its flagship money market funds, the BLF Treasury Trust Fund (TTTXX). 

Think of it as combining your grandparents’ safe, treasury-backed assets with the cutting-edge tech of blockchain. However, don’t get too excited about tokenized securities or crypto trading. These DLT shares won’t be tokens. The goal is to maintain a “mirror record” of share ownership within a blockchain ledger.

Sounds fancy, but what does that really mean? Blockchain tech will serve as a parallel ledger — not the official ownership record but rather a sidekick for transparency and easier account verification. By doing so, BlackRock hopes to provide enhanced investor confidence, allowing institutions to track ownership records securely and efficiently.

Key Details from the Filing:

• The BLF Treasury Trust Fund commands over $150 million in assets, largely invested in U.S. Treasury bills and cold-hard cash.
• Shares can only be purchased and managed through BlackRock Advisors and the Bank of New York Mellon (BNY).
• A minimum investment of $3 million is required, limiting participation strictly to institutions and accredited investors.

Don’t Get It Twisted

Unlike other blockchain ventures like BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL), BlackRock’s DLT shares aren’t about tokenizing assets or plunging deeply into decentralized finance (DeFi). 

Instead, they stick firmly to blockchain’s original purpose: creating reliable, secure, and traceable records. Investors still operate within the traditional framework as the fund’s official ownership ledger is maintained using book-entry records alongside the blockchain.

This move may frustrate crypto purists who lean toward the “decentralize everything” ideology. But for institutions and more risk-averse players, it’s a welcome use of technology that merges the innovative perks of blockchain with the stability of well-regulated financial systems.

Following the Path Fidelity Set

Interestingly, BlackRock’s move mirrors Fidelity’s decision to incorporate blockchain into its own operations. Fidelity filed on March 21 to roll out its own Ethereum-based OnChain share class linked to its $80 million Treasury-focused Fidelity Treasury Digital Fund (FYHXX). 

While Fidelity awaits regulatory approval, expected by May 30, it’s paving the way for blockchain adoption in the largely traditional money market space.

Why Use Cases Matter

Use cases are what’s going to take blockchain from fringe to mainstream. And once its being used in a variety of different industries, crypto, DeFi, and everything else will likely follow.

Whether you’re just starting to explore the blockchain world or have been knee-deep in crypto since the Bitcoin pizza days, there are a few other takeaways to think about:

Institutional Appeal

BlackRock’s blockchain use case isn’t flashy, but it’s practical. Leveraging blockchain to verify ownership records for large institutional players introduces much-needed transparency without adding speculative risk. 

For long-term investors and large organizations, this could signal a new era where blockchain supports existing systems rather than seeking to replace them outright.

Mainstream Validation

Whenever BlackRock moves, the broader financial world takes notice. With over $150 million tied to these efforts in just one fund, it’s safe to say this isn’t some side project. 

Applying blockchain in a practical, permissioned environment, BlackRock is helping mainstream this technology within traditional finance.

Tapping into Blockchain’s Strengths

Blockchain was invented for trust, transparency, and efficiency. BlackRock using it as a transparency tool (and not as a product to hype) shows that enterprises are finding ways to harness crypto and blockchain innovations responsibly.

How Does This Impact Smaller Investors?

Good question. The short answer is that it doesn’t. 

The longer answer is that this is one of the many small steps toward blockchain integration into broader financial systems. 

What starts at the top usually trickles down to smaller, more accessible products in the future. Today, it’s BlackRock and large institutions, but tomorrow, retail investors could see blockchain-backed transparency — even within their own portfolios. Eventually, it will be in all of our everyday lives.

The Future of Blockchain as a Tool

At its core, BlackRock’s latest filing shows just how versatile blockchain technology can be. Instead of slapping on a crypto buzzword or hyping up tokenization, they’ve chosen to apply it in a grounded way. 

It could pave the way for similar systems across various markets. The tech may not disrupt banking tomorrow, but it’s quietly starting a transformation investors would be wise to follow.

If you want to explore cryptocurrencies, blockchain, or how these technologies affect your traditional investments, keep an eye on the Dypto Crypto newsroom.