Real-world asset (RWA) tokenization firm Securitize Markets submitted an application last week “on behalf of BlackRock” to Arbitrum’s Stable Treasury Endowment Program (STEP), a sign of the growing institutional presence in the crypto space.
Arbitrum’s STEP program will diversify 35 million ARB tokens, worth roughly the same amount in dollar terms, into “assets that are stable in value with minimal volatility, liquid in conversion, and provide yield uncorrelated to crypto markets,” according to a passed onchain governance vote for STEP.
Through STEP, Arbitrum is specifically targeting stable real-world assets backed by Treasury bills and money market instruments. However, those interested in being a service provider to diversify the 35 million ARB tokens had to apply.
Securitize is the distributor of BlackRock’s BUIDL Fund, which has seen over $382 million in deposits, per analytics platform rwa.xyz. Securitize applied to be one of those service providers, proposing that the first potential investment from Arbitrum’s treasury have a minimum transaction size of $5 million, with $250,00 minimum follow-ons.
Securitize and BlackRock’s application highlights the ongoing and rising interest of institutions attempting to have tokens on a blockchain represent real-world assets. The total value of all tokenized treasury product tokens has increased nearly 80% from $718 million at the start of the year to $1.28 billion at the time of publication, data from rwa.xyz shows.
If Arbitrum’s governance permits and moves forward with Securitize and BlackRock’s application, BlackRock Financial Management will be responsible for the Fund’s investment activities, Securitize will provide the distribution channel for the tokens and create the tokens on the blockchain, while Bank of New York Mellon will “act as the administrator for the Fund and custodian for the Fund’s assets,” according to application in Arbitrum’s governance forum.
The proposed application states that the underlying assets would be composed of “cash, Treasury bills, notes or other obligations that mature in three months or less from the settlement of the purchase in both the primary and secondary markets.”
Securitize and BlackRock Not Alone
Securitize and BlackRock’s application is just one of over 25, which also include crypto asset management firm Superstate, securities investment platform Dinari, DeFi lending platform Centrifuge, and stablecoin issuer Frax Finance.
The last day to submit an application for Arbitrum’s STEP program was Monday, which means the STEP committee – composed of Karpatkey, FFX Labs, Steakhouse Financial, Nethermind, North Lakes Legal, and Arbitrum Treasury Working Group – will review each application and determine whether to allocate part of Arbitrum’s treasury to those who submitted an application.
“We submitted a proposal to be part of the @Arbitrum DAO as the placement agent for Blackrock’s BUIDL, and we hope to get the support of the @Arbitrum community to bring a large TradFi institution into their treasury,” wrote Securitize Founder Carlos Domingo on X.
