Tokenization and Privacy: BlackRock Sets Standards While a16z Identifies Privacy Solutions as Competitive Advantage

BlackRock Demonstrates Potential of Tokenized Securities

Asset manager BlackRock has achieved remarkable success with its tokenized money market fund BUIDL. Since launching in March 2024, approximately $100 million in dividends have been distributed to investors, while assets under management have grown to over $1.7 billion—an increase of more than 30-fold since launch ^[1].

The fund strategically invests in short-term U.S. Treasury securities, repurchase agreements, and cash equivalents, and has now expanded its volume to over $2 billion ^[1]. Unlike stablecoins, BlackRock structures BUIDL as a regulated money market fund whose shares are issued and settled as tokens on public blockchains ^[1].

Expansion and Integration into Crypto Infrastructure

Following its initial launch on Ethereum, BlackRock has expanded the fund to additional networks to meet growing demand for yield-bearing onchain dollar products ^[1]. With its high distributions, BUIDL provides concrete evidence that tokenized securities generate real cash flows and are not merely theoretical use cases ^[1].

Institutional investors are increasingly using tokenized money market funds as a regulated alternative to stablecoins to represent interest-bearing dollar positions onchain ^[1]. At the same time, regulators are placing greater focus on risks such as settlement processes, liquidity assumptions, and the behavior of tokenized securities during stress periods ^[1].

Beyond pure yields, market participants are actively integrating BUIDL tokens into crypto financial infrastructure, such as collateral for stablecoins like Ethena's USDtb or as security in trading and financing structures ^[1]. With BUIDL, BlackRock is directly connecting traditional money markets with the growing movement to systematically represent collateral, settlement, and yield strategies onchain ^[1].

a16z Identifies Privacy as Critical Competitive Factor

Crypto VC Andreessen Horowitz (a16z), led by technology pioneer Andreessen Horowitz, views privacy as the most important competitive advantage in the crypto sector, one that will ultimately determine dominance or irrelevance in the long term ^[2]. The VC shared this assessment in a post on X ^[2].

While public blockchains are easily interchangeable, private systems create strong lock-in effects because users associate switching with the risk of exposing sensitive data ^[2]. As transaction fees and blockspace become increasingly commoditized across many networks, the VC sees privacy as one of the last true differentiating factors with lasting network effects ^[2]. This leads to a "winner-take-most" dynamic in which only a few privacy chains will succeed in the long term ^[2].

Privacy Coins with Strong Performance

This assessment is already partially reflected in price performance, as privacy coins significantly outperformed market leaders like Bitcoin and Ethereum in 2025 ^[2]. Zcash recorded a price increase of approximately 853 percent over the year, while Monero gained about 123 percent, increasingly being perceived as a hedge against surveillance and data control ^[2].

The trend coincides with a period of increasing regulatory intervention and growing societal sensitivity to financial privacy, lending additional relevance to the topic ^[2].