BlackRock, State Street Launch Tokenized Stablecoin Products for Institutional Investors

Concerned about an AI bubble? Sign up for The Daily Upside for smart and actionable market news, built for investors.

 Dollars, who? Stablecoins are where it’s at for many large investors, and asset managers are taking notice.

Tokenization has become Wall Street’s answer to attracting the large institutions and crypto firms opting to hold their cash in stablecoins as opposed to the traditional routes. Some of the largest asset managers are now launching new products to woo those investors. BlackRock filed for a new tokenized money-market fund and digital class of existing fund this month. The BlackRock Daily Reinvestment Stablecoin Reserve Vehicle will invest in cash, short-term US Treasury securities and overnight repurchase agreements secured by Treasuries, according to the filing. The other is an onchain share class of its BlackRock Select Treasury Based Liquidity Fund. Both funds have a $3 million minimum investment.

Sign up for The Daily Upside at no cost for premium analysis on all your favorite stocks.

READ ALSO: Inflation Is Heating Up. So Are These TIPS Funds and DRAM’s Success Leaves Investors Looking for the Next Bottleneck Trade 

Heading Onchain

BlackRock is far from the only asset manager looking for ways to appeal to the crypto-native masses. Earlier this month, State Street Investment Management launched the State Street Galaxy Onchain Liquidity Sweep Fund, a tokenized cash-management product allowing large stablecoin holders to sweep their assets into an on-chain, yield-bearing asset.

The firm aims to bridge traditional finance with the rapidly evolving digital asset ecosystem, “bringing familiar, high-quality investment strategies into a format that aligns with how a growing cohort of investors hold and manage their capital on chain,” Kim Hochfeld, global head of cash, securities lending and digital assets at State Street, told ETF Upside.

• The firm’s first tokenized product represents an important milestone for State Street. “It serves as a foundational step toward scaling a broader suite of on-chain investment solutions, positioning State Street at the forefront of the convergence between traditional asset management and blockchain-enabled finance,” Hochfeld said.

• The future of asset management will span both traditional and blockchain-based products, she added, whether those are onchain or through more traditional vehicles like exchange-traded funds.

BlackRock declined to comment on the filings.

Need for Speed: State Street’s fund launches on the Solana blockchain, and plans to integrate with Stellar and Ethereum. It’s a shift from institutional risk to architectural risk, said Gabriel Shahin, founder and CEO of Falcon Wealth. “With a traditional Treasury fund, you’re essentially trusting the ‘armored truck,’ meaning the infrastructure is slow, but it’s proven,” he said. State Street’s fund trades that for the speed of Solana. “It’s like upgrading from a horse and buggy to an F1 car. The speed is incredible, but at 200 mph a technical glitch is instantaneous and irreversible.”

This post first appeared on The Daily Upside. To receive exclusive news and analysis of the rapidly evolving ETF landscape, built for advisors and capital allocators, subscribe to our free ETF Upside newsletter.