BlackRock Clarifies Role in Hedera Announcement: Tokenization Details Revealed

• The Hedera Foundation announced the tokenization of BlackRock’s ICS US Treasury Money Market Fund on the Hedera network.
• Archax and Ownera decided to tokenize the fund shares they held, clarifying BlackRock’s non-affiliation with Hedera.

BlackRock has clarified the confusion surrounding the announcement involving the Hedera Foundation. On April 24th, BeInCrypto reported a price surge of over 100% for HBAR following news of an innovative partnership with BlackRock.

Facilitated by @ArchaxEx, shares of @BlackRock’s ICS US Treasury money market fund are now tokenized on the #Hedera network. #RWA

The first transaction of tokenized shares was completed across the @OwneraIO #DigitalAsset network.

It’s as simple as that.

— Hedera (@hedera) April 25, 2024

The Hedera Foundation announced the tokenization of BlackRock’s ICS US Treasury Money Market Fund (MMF) on the Hedera network through ArchaxEx and OwneraIO in a tweet, integrating the world’s largest asset manager onto the blockchain.

We wanted to provide some clarification surrounding Tuesday’s announcement:

The @ArchaxEx team, in partnership with @OwneraIO, has tokenized its shares of the @BlackRock ICS US Treasury MMF and selected @Hedera.https://t.co/574NfPdc1P

— HBAR Foundation (@HBAR_foundation) April 25, 2024

However, BlackRock swiftly clarified that there was no business relationship with Hedera. A spokesperson emphasized that only the cryptocurrency firms Archax and Ownera decided to tokenize the fund shares they held.

“BlackRock has no commercial relationship with Hedera nor has BlackRock selected Hedera to tokenise any BlackRock funds.”

Shortly after, Graham Rodford, Co-founder and CEO of Archax, elaborated on asset tokenization using blockchain technology. He clarified his company’s stance on the innovation and addressed the recent confusion, explaining that clients instructed Archax to invest in BlackRock’s funds, making their nominee company the legal owner.

(1/18) Fund tokenisation, a thread (which may help with some confusion). Let me set the scene – and please stay with me to the end…@archaxex is an FCA regulated broker, custodian and exchange, and registered cryptoasset provider in the UK.

— Graham (@Grodfather) April 24, 2024

Thus, it is unequivocally clear: the purported “innovative partnership” between BlackRock and Hedera does not exist. Reflecting on blockchain technology’s development journey, the ability to purchase fund shares as on-chain tokens remains a advancement.

“What we saw on Twitter was kind of pretty much close to the truth […] Archax had clients that wanted to invest in the BlackRock money market fund. When they expressed an interest we opened an account at BlackRock so that we could,” explained Roford.

While the crypto space has long been criticized for fraud, it now offers tangible use cases for the traditional financial world and beyond. Hence, the prospect of such a partnership materializing in the future does not seem far-fetched.

“With most of the investments we make, we want to tokenize them, we told them [BlackRock] we were going to and then just out of the good relationship with them we said ‘hey we’re putting out a press release, you guys happy to check it?’ — so they checked it and gave their views on it,” he explained.

Archax, in collaboration with Ownera, has tokenized its shares of BlackRock’s ICS US Treasury MMF, partnering with Hedera. This expansion broadens the range of tokenized fund shares offered by Archax, the first FCA-regulated digital asset exchange, broker, and custodian.

Today’s announcement signifies Archax’s extension of tokenized access to BlackRock’s ICS US Treasury money market fund, complementing its previous launch of tokenized abrdn’s MMFs on both the Hedera and Ethereum blockchains. These tokenized offerings, including the newly added BlackRock MMF, are accessible directly on the Archax platform and connected networks.

Moreover, by establishing a secondary market for tokenized instruments, Archax facilitates nearly instantaneous MMF share transfers throughout the day. This advantage not only enhances liquidity but also enables the tokens’ utilization for collateral movement beyond traditional subscriptions and redemptions.

Tokenization projects typically involve the counterparty holding the underlying assets and tokenizing their records due to various factors such as cost, local regulations, and custodian-investor interactions. Archax explores both natively digital funds and tokenized records, facilitating investment management processes for its clients.