On Wednesday, BlackRock, the world’s largest asset manager, successfully acquired municipal debt through a transaction that exclusively utilizes blockchain technology. According to a Bloomberg report, this marks the first instance of municipal bonds being purchased, settled, and held entirely on a blockchain platform.

BlackRock’s Historic Bond Deal

Per the report, the bonds were issued earlier this year by the city of Quincy, Massachusetts, and were underwritten by JPMorgan Chase & Co. 

The transaction was facilitated through an application on JPMorgan’s private, permissioned blockchain platform, known as Digital Debt Service. Interestingly, this approach not only streamlines the bond issuance process but also enhances transparency and security in municipal finance.

BlackRock’s acquisition was made through its actively-managed exchange-traded fund, the iShares Short Maturity Municipal Bond Active ETF (MEAR). Since its inception in 2015, MEAR has attracted approximately $750 million in client assets. 

As part of this historic deal, BlackRock has taken a total position of $6.5 million in the Quincy bonds, according to data compiled by Bloomberg. Pat Haskell, head of BlackRock’s municipal bond group, expressed optimism about the transaction, stating: 

The use of blockchain throughout the lifecycle of bonds is just one example of the potential for this technology to transform capital markets. This transaction marks a significant moment for the municipal bond market and is a testament to BlackRock’s dedication to innovation.

The prospectus for MEAR was recently updated to permit the fund to invest in municipal bonds settled through JPMorgan’s blockchain application, as indic

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Author: Ronaldo Marquez