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