BlackRock’s iShares Short Maturity Municipal Bond ETF, also known as MEAR, has made groundbreaking history by acquiring municipal bonds issued and settled entirely on blockchain technology.
The municipal bonds, issued by Quincy, Massachusetts in April, were transacted using JPMorgan Chase’s private blockchain platform. This innovative deal involved the issuance and settlement of bonds on the blockchain, bypassing traditional methods entirely.
The Quincy transaction, which included $6.5 million in municipal debt purchased by BlackRock, a prominent player in the financial industry, was executed as part of their actively managed ETF, MEAR. MEAR currently holds $750 million in client assets and has been operational since 2015.
Quincy Bonds and JPMorgan’s Blockchain Technology
Earlier this year, the city of Quincy made waves by issuing bonds using blockchain technology instead of the conventional system. JPMorgan’s blockchain platform, Digital Debt Service, played a pivotal role in this groundbreaking initiative.
This platform streamlined the process by eliminating intermediaries, resulting in a faster and more efficient bond issuance and settlement. This marked the first-ever attempt in municipal finance to keep bonds on the blockchain throughout the entire process.
BlackRock was the first major player to participate in the Quincy deal. The firm updated its ETF’s prospectus to allow for blockchain-based bond investments, necessitating a filing with the U.S. Securities and Exchange Commission. The filing also highlighted potential risks, such as limited liquidity and the potential for bugs or errors in the blockchain application.
Historically, municipal bonds have been associated with paperwork and delays, but the integration of blockchain technology is revolutionizing this conservative market segment.
BlackRock’s Strong ETF Performance
BlackRock’s iShares Bitcoin Trust (IBIT), launched earlier this year, has been setting records. In the past day alone, IBIT attracted $740 million in inflows, bringing its total assets under management to over $51 billion, making it one of the fastest-growing ETFs in history.
Combined with Ethereum ETF inflows, BlackRock’s crypto ETFs saw a total of $860 million in inflows in just one day, surpassing the performance of BlackRock’s gold ETF, which has been established since 2005. Investors are flocking to IBIT while competitors like Grayscale’s Bitcoin Trust are experiencing significant outflows, with Grayscale recording $21 billion in outflows this year.
The surge in Bitcoin’s price, trading above $108,000, has further fueled investor interest. With a dovish Federal Reserve policy and increasing institutional demand, market analysts anticipate Bitcoin to reach $110,000 soon.
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