BlackRock Inc. has taken its blockchain engagements further by purchasing municipal debt issued earlier this year. This municipal debt is settled using blockchain technology, setting up BlackRock as a pacesetter.
About the BlackRock Muni ETF Purchase
The bond purchase was markedly conducted through an actively managed exchange-traded fund called the iShares Short Maturity Municipal Bond Active ETF or MEAR.
The President of ETF Store, Nate Geraci, recognizes BlackRock’s move as baby steps toward a fully tokenized future.
In April, the securities were first issued by Quincy, Massachusetts.
The sale was facilitated through an application on JPMorgan Chase & Co.’s private, permissioned blockchain-based platform.
One of the holdings included in the ETF is worth a total of $6.5 million in the Quincy deal. Speaking about the deal, Pat Haskell, head of the municipal bond group at BlackRock, stated that,
“The use of blockchain throughout the lifecycle of bonds is just one example of the potential for this technology to transform capital markets. This transaction marks a significant moment for the municipal bond market and is a testament to BlackRock’s dedication to innovation.”
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A filing dated December 27 submitted to the United States Securities and Exchange Commission (SEC) acknowledged that the prospectus for MEAR was recently updated.
These changes helped allow the fund to invest in muni bonds settled on JPMorgan’s application Digital Debt Service.
A major disclaimer was issued to inform them of the risks involved, including lack of liquidity and potential errors. The potential for bugs or limitations in the application’s underlying computer code also exists.
Several issuers and underwriters have been testing the demand for blockchain technology in the muni market for a few years.
For example, the Michigan State University board of trustees also considered this a deal that would have been registered on a proprietary digital assets platform provided by Goldman Sachs.
BlackRock and Crypto ETF Products
BlackRock gained huge traction at the beginning of this year with the launch of iShares Bitcoin Trust.
Since the iShares Bitcoin Trust launch, the offering has recorded tremendous results, outperforming the other top rivals.
While the likes of Grayscale’s GBTC see huge outflows from their holdings, IBIT has impressed with sustained massive inflows.
In the first week of December, IBIT’s Bitcoin holding skyrocketed to over 500,000 BTC. The milestone was fueled by a $338.3 million net inflows recorded daily in the broader Bitcoin ETF market.
The ETF offering will mark its first anniversary on January 11, 2025, and BlackRock’s stash may have increased significantly by then.
Also, BlackRock’s Ethereum ETF (ETHA) is also gaining investors’ attention. The surge in ETHA inflows is largely attributed to the recent action in the broader crypto ecosystem.
Bloomberg Prediction for ETFs in 2025
As the new year approaches, the future of the crypto market already looks promising.
Bloomberg weighed in on the potential outlook of the market in 2025 and projects the emergence of more crypto ETFs.
According to an X post from Senior Bloomberg ETF Analyst Eric Balchunas, the industry is gradually expanding from cheap passive providers to active management and problem-solving.
He also pointed out that appointing a new SEC Chair will bring about much-anticipated changes in the crypto space.
Source: https://www.thecoinrepublic.com/2024/12/19/blackrock-buys-blockchain-powered-muni-bond-etf-details/