Ondo Finance tests conversion of BlackRock's RWA fund to USDC
Circle initiates smart contract for BlackRock's USD digital liquidity fund investors.
Ondo Finance is testing the conversion of BlackRock's RWA fund to USDC. Photo: Altcoin Buzz
According to the latest announcement, stablecoin issuer Circle has deployed a smart contract enabling investors to almost instantly convert between USDC and BlackRock's RWA fund with the new BUIDL token.
As reported by Coin68 on March 20, BlackRock established the RWA investment fund with Securitize named "USD Digital Liquidity Fund." Simultaneously, a token with the code BUIDL was created on Ethereum, closely tied to the aforementioned investment fund. BUIDL represents holdings in US Treasury bonds and repo agreements held by BlackRock within the new product.
Today, @circle announced new smart contract functionality that would allow holders of the BlackRock USD Institutional Digital Liquidity Fund (BUIDL) to transfer their shares to Circle for USDC.
— Securitize (@Securitize) April 11, 2024
Read Circle's press release: https://t.co/wdVbaVrKN9
In its first week, capital inflows into BUIDL exceeded USD 160 million, and the current figure stands at USD 288 million, according to Etherscan.
Recently, an Ethereum wallet under Ondo has conducted a transaction converting USD 250,000 worth of BUIDL to USDC. This marks the testing of Circle's new USDC-to-BUIDL feature. Nathan Allman, CEO of Ondo Finance, confirmed this with the media.
From Blackrock to Ondo Finance 👀👀 pic.twitter.com/FX5EVI6hRP
— Pedro DC (@Pedr0_DC) April 11, 2024
BlackRock's BUIDL is exclusively for institutional investors, with a minimum deposit of USD 5 million. However, they allow RWA projects like Ondo to use BUIDL as collateral to serve their individual clients.
Under BlackRock's leadership, other tokens in the RWA sector have also gained significant traction recently. Among them, Ondo Finance has increased by nearly 10% following this news.
Price fluctuations of ONDO on the D frame, CoinMarketCap screenshot taken at 11:00 AM on April 12, 2024.
In 2022, BlackRock invested in Circle's USD 400 million funding round, initiating collaboration between the two companies. By November that year, Circle began collateralizing assets for USDC into the currency fund managed by BlackRock.
As of January 2024, BlackRock manages over USD 10 trillion in assets. The company is also one of the eleven US giants approved to list Bitcoin spot ETFs at the beginning of the year.
