BlackRock’s iShares ETF Makes History with Unique Blockchain-Powered Municipal Debt Deal

On Wednesday, BlackRock, the world’s largest asset manager, successfully acquired municipal debt through an exclusive-use deal Blockchain technology. According to a Bloomberg report, this represents the first example of municipal bonds being purchased, settled and held entirely on a blockchain platform.

BlackRock’s historic bond deal

per a reportThe bonds were issued earlier this year by the city of Quincy, Massachusetts, and were underwritten by JPMorgan Chase & Co.

The transaction was facilitated through an application on JPMorgan’s private and licensed blockchain platform, known as the Digital Debt Service. Interestingly, this approach not only simplifies Bond issuance process but also enhances transparency and security in municipal finance.

The acquisition of BlackRock was made through its actively managed exchange-traded fund, the iShares Active Short Maturity Municipal Bond (MEAR) Fund. Since its inception in 2015, MEAR has attracted approximately $750 million in client assets.

As part of the landmark deal, BlackRock took a total position of $6.5 million in Quincy bonds, according to data compiled by Bloomberg. Pat Haskell, head of BlackRock’s municipal bond group, expressed optimism about the deal, saying:

The use of blockchain technology throughout the life cycle of bonds is just one example of how this technology has the potential to transform capital markets. This transaction represents an important moment for the municipal bond market and is a testament to BlackRock’s dedication to innovation.

The MEAR prospectus was recently updated to allow the fund to invest in municipal bonds settled through JPMorgan’s blockchain application, as described in a filing with the U.S. Securities and Exchange Commission dated Dec. 17.

However, investors are warned about potential risks, including the lack of… Liquidity and the possibility of errors or limitations inherent in the underlying computer code of the Application.

In recent years, many issuers and insurers have explored the feasibility of blockchain technology in the municipal bond market.

Notably, the Michigan State University Board of Trustees considered a deal that would use a private digital asset platform developed by Goldman Sachs, highlighting the growing interest in integrating blockchain solutions into traditional finance.

iShares Bitcoin Trust Reaches $60 Billion

In the space of exchange-traded funds (ETFs), BlackRock has received a lot of attention, particularly due to consistent inflows throughout the year. Notably, the iShares Bitcoin Trust (IBIT) has outperformed the gold exchange-traded fund in terms of… Assets under management (Ohm).

According to For Ki Young Joo, CEO of market intelligence firm CryptoQuant, it took 20 years for BlackRock’s gold ETFs to reach $33 billion in assets under management. In contrast, the Bitcoin ETF has nearly doubled that number in less than a year, approaching $60 billion.

This development occurs amid notable fluctuations in the price of Bitcoin over the past 48 hours, as traders anticipate the US Federal Reserve’s decision on… Interest rate cuts. During this period, although Bitcoin briefly fell below the $100,000 level, BlackRock seized the opportunity to… buying $1 billion in Bitcoin.

At the time of writing, despite losing the $100,000 milestone, Bitcoin has managed to regain this level and is currently trading at $101,240. However, the market-leading cryptocurrency still recorded losses of 2.3% on the 24-hour time frame.

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