Novogratz on RWA Growth: BlackRock's BUIDL Hits $1B AUM
Mike Novogratz, Galaxy Digital's CEO, reaffirmed his bullish outlook on Real-World Asset (RWA) tokenization, following BlackRock's BUIDL fund exceeding $1 billion in Assets Under Management (AUM).
Mike Novogratz's RWA Predictions
Novogratz, a long-time proponent of blockchain in traditional finance, believes tokenization will fundamentally reshape the financial industry. He contends that any asset capable of being tokenized will eventually be on-chain. His recent comments highlight blockchain's growing role in financial infrastructure, particularly in tokenization initiatives.
He argues that blockchain offers transparency, efficiency, and enhanced security, making it appealing to institutions. Novogratz views the shift towards tokenization not as a theoretical possibility, but as an active and rapidly accelerating movement across multiple financial sectors.
Novogratz foresees blockchain-based financial products becoming indispensable tools for institutional investors, driven by a need for improved liquidity and settlement processes. This aligns with a broader trend of financial institutions integrating blockchain into their asset management strategies, a shift he anticipates will accelerate significantly in the coming years. He attributes this largely to the rapidly developing blockchain infrastructure.
BlackRock's BUIDL Milestone
BlackRock's BUIDL fund, launched in March 2024 in partnership with Securitize, has reached a significant milestone, surpassing $1 billion in AUM. This ERC-20 token on the Ethereum blockchain offers institutional investors exposure to U.S. Treasury bills and repurchase agreements, leveraging blockchain for enhanced security and liquidity.
BUIDL's growth was significantly boosted by the launch of a Frax Finance stablecoin using BUIDL as its backing reserve. This underscores the rising demand for tokenized financial products and showcases the integration of blockchain technology into traditional asset management.
BlackRock aims to improve liquidity, streamline transactions, and reduce counterparty risk by tokenizing U.S. Treasury assets. BUIDL's success reflects a broader industry trend towards blockchain-based investment vehicles. In January, BlackRock CEO Larry Fink urged the SEC to approve the tokenization of bonds and stocks, further accelerating the RWA push.
Other Firms Embracing Tokenization
Ripple Labs, known for blockchain payments, is expanding its focus on tokenization. In November 2024, it launched its first tokenized money market fund on the XRP Ledger in partnership with Archax and abrdn. Ripple also launched the RLUSD stablecoin in December 2024, further demonstrating its commitment to RWAs.
As Novogratz predicted, the adoption of tokenized assets is accelerating, with major players like BlackRock and Ripple leading the charge.
Codeum Note: Codeum provides comprehensive blockchain security and development services, including smart contract audits, KYC verification, custom smart contract and DApp development, tokenomics and security consultation, and partnerships with launchpads and crypto agencies. Contact us to ensure the security and success of your blockchain project.