BlackRock Inc., whose iShares unit is the world’s largest ETF issuer, purchased bonds for its municipal bond exchange-traded fund using a blockchain system, the first company to do so using JPMorgan Chase & Co. platform.
THE BlackRock Short Maturity Municipal Bond ETF (MEAR) bought debt in Quincy, Mass., which issued $10 million worth of bonds in April. The sale was made through Digital Debt Service, part of JPMorgan’s Kinexys Digital Assets blockchain platform.
The sale was the first municipal bond issue in the United States to be settled on a blockchain-based platform, and according to BlackRock’s MEAR page, the company purchased $6.5 million of Quincy debt.
BlackRock, which manages $3.04 trillion across 438 exchange-traded funds, is among the companies embracing the efficiency and speed touted by blockchain technologies. The New York-based company reiterated its commitment to so-called tokenization, in which assets such as cash and U.S. Treasury bills are returned as electronic copies and transferred to a blockchain ledger.
Earlier this year, the company, which operates the largest cryptocurrency ETFs Bitcoin and Ethereum, launched the BlackRock USD Institutional Digital Liquidity Fund, which “tokenizes” cash and Treasuries.
The use of the blockchain platform in the sale was first reported by Bloomberg News, which said other issuers and underwriters were investigating whether or not the muni market had demand for blockchain technology.
“The use of blockchain throughout the bond lifecycle is just one example of this technology’s potential to transform capital markets,” said Pat Haskell, head of BlackRock’s municipal bond group. , at Bloomberg.
It wasn’t long ago that BlackRock was a digital skeptic, with CEO Larry Fink at one point saying cryptocurrency was “an indicator of money laundering.” The firm iShares Bitcoin Trust (IBIT) is the largest crypto ETF, with $57.7 billion in assets and $43.3 billion in inflows since it began trading in January. Its price has doubled since its launch.
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