BlackRock and Tether Push Crypto Closer to Banking

BlackRock launched two tokenized money market funds this week, aiming to let stablecoin issuers hold reserves onchain under the new US stablecoin law. Tether booked a $1.5 billion net operating profit in the second quarter, driven by interest on its US Treasury holdings. The two moves point to a broader shift. Crypto's business model is converging with traditional finance.

One fund tokenizes shares of BlackRock's existing Treasury liquidity strategy on Ethereum. Approved investors can transfer ownership onchain while the underlying assets stay in cash and short-term government securities, BlackRock said. The second is a new institutional money market vehicle built for digital asset markets. It supports multiple blockchains and automatically reinvests income, making it suitable for stablecoin reserve management.

The launch follows the GENIUS Act, which set a federal framework for payment stablecoins. Wall Street firms have been pushing into onchain products since the law passed. BlackRock already runs BUIDL, the largest tokenized Treasury fund. The tokenized Treasury market has grown quickly as issuers seek yield on reserves.

Tether's quarterly attestation showed a reserve buffer of $4.11 billion as of June 30, with assets exceeding liabilities by that amount. USDT circulating supply rose by $446 million to $184.6 billion, preserving Tether's share of more than 60% of the global stablecoin market, which DeFiLlama valued at roughly $307 billion. The company's earnings continue to benefit from elevated short-term interest rates, which boost income from Treasury bills and cash equivalents. Tether remains one of the largest holders of US Treasury securities, the attestation said.

American Bitcoin, the miner co-founded by Eric Trump and Donald Trump Jr., reported record quarterly production of 932 BTC. Mining revenue rose 8% to $67 million from $62.1 million in the first quarter. The company posted a net loss of $57.2 million, narrower than the $81.8 million loss in Q1. It completed a 1-for-15 reverse stock split last month to maintain its Nasdaq listing after its share price fell below the minimum bid. Hut 8, which holds a majority stake, had pledged about 3,090 BTC as collateral under equipment purchase agreements with Bitmain, the miner said.

Hut 8 carries an Alpha Score of 62, indicating a moderate risk profile, according to AlphaScala data. The miner's pledged Bitcoin holdings expose the company to additional risk if BTC prices decline, the filing noted.

Tokenized gold proved resilient during March's market sell-off, a RedStone report found. Spot trading volume reached $90.7 billion in Q1, yet only about $63 million of Tether Gold and PAX Gold is used as collateral on Aave v3 and Morpho. That is just 1.5% of their combined $4.2 billion market cap, according to RedStone. On March 23, Aave processed its largest cluster of XAUT liquidations without disruption after gold fell 10% in a week. JPMorgan's Greg Shearer described it as an "extremely brutal flush."

Gold futures have since declined more than 20% from January peaks on expectations of higher US interest rates. RedStone said tokenized gold's infrastructure gap remains as tokenized real-world assets scale.

The tokenized Treasury market now stands at roughly $4 billion, with BlackRock's BUIDL accounting for the largest share. The convergence of stablecoin reserves, tokenized funds and balance sheet management is reshaping crypto's revenue model, pushing it closer to the structure of a traditional bank.